I had written about the need for Pakistan to have proper and co-ordinated Port Master Plan (PMP) sometime in November 2009 to generate the maximum benefits for the nation. Any PMP should also create the maximum efficiency for handling and movement of cargo.
Efficiency not only involved minimising the tangible cost to those who are directly engaged in the business of handling and moving cargo, but also the intangible impact such as environmental impact on all Pakistanis. One issue, which has not attracted the attention of the policymakers, is the handling of dirty cargo like coal, phosphate in bulk form and its impact on humans and the environment.
This brings to mind the handling of cargo at the Karachi Port. A total of 3.4 million tons of coal was handled as the Karachi Port during 2008-2009. Conservative estimates indicate that this figure will be close to 4 million tons during 2010-2011. This increase in volume will result in an increase in revenues for the port and for allied businesses and bring economic benefits to Karachi and Pakistan.
The incessant demand for energy to support a growing population has spurred ports such as Karachi to dedicate spaces as the KPT did at the Keamari, for the imported coal, which is stored in the open after being off-loaded from ships. As the volume of coal imports increases so does the size of the coal yard at Keamari. While economic materials are reaped by businesses, intangible costs are borne by others who live and work in the area.
The area where coal is handled at the Keamari area is adjacent to the residential colonies of Keamari and Jackson, which house thousands of residents, comprising people who cannot afford decent healthcare. The continued handling of coal in an area containing major population centers and storage of explosive material does not consider the long term welfare of the people in Karachi, especially those living right next to the area.
The question that must be asked is whether there is any serious long-term plan to move the handling of dirty cargo such as coal, phosphate further away from population centre. For those in daily contact with these polluting substances, there is untold suffering.
A port traffic department officer, already suffering respiratory problems, said, on the condition of anonymity that the yard now covers an area of 12.5 hectares with circular mounds of coal piled up to a height of over 150 feet at some places. Coal is transported from the berths to the yard in open top dumper trucks that spill coal on their way to the yard. He added that of all the dirty cargos handled by the port, coal was by far the dirtiest and that he was trying to get a transfer to some other berth as his health continues to deteriorate.
Efforts to curb coal dust from being carried away by the strong coastal winds blowing towards densely inhabited areas has remained cosmetic, as water sprinkling is being kept to the minimum so as not to increase the moisture contents of the coal thus decreasing its market value and utility. Then, there is the real concern about risk of a major explosion as the Keamari coal yard is situated adjacent to the Keamari oil terminals.
Despite repeated caution warnings of such potential risk by oil terminal owners, coal dust continues to accumulate forming a thick layer on top of the large tanks containing various types of highly inflammable petroleum products. Thus increasing risk of igniting the highly flammable products through what is technically known as the coal dust explosion hazard.
Despite this pending risk the KPT continues to ignore occupational safety and health guidelines for coal dust handling and continues to invest more funds in its Keamari coal yard by building a 1.87 km rail link to the yard in 2010 at a cost of Rs 55.54 million and also plans to install a new sprinkler system.
These investments will do little to reduce the environmental and health hazards posed by the coal yard but might go a long way in ensuing that the coal yard is not relocated as any such shifting of the coal yard might be detrimental to the interests of KPT officials. When queried where the water spill from the sprinkler system would end up it was indicated by staff that this spill, comprising coal slurry, will flow unabated into the sea causing incalculable damage to fisheries and other marine life.
Another matter is that the KPT plans to build a new terminal for the handling of containers in the area adjacent to the coal terminal. Phase I of the terminal will be capable of handling 3.1 million TEUs (twenty foot equivalent boxes). When all the phases are completed, it is capable of handling 10 million TEUs.
Experience in other parts of the world demonstrates that it is a natural development that following a plan for container handling, dirty cargo handling is moved to another location. Handling coal so close to a container terminal poses major risks to the employees working at the terminal. The impact of coal dust on equipment leads to frequent breakdown and could cause accidents risking lives.
The long-term solution could be to move the handling of dirty cargo from the Keamari area to Port Qasim. The Port Qasim Authority signed an agreement with Pakistan International Bulk Terminal Ltd in November 2010 establishing a US $173 million modern bulk coal and cement terminal with a backup area of 25 hectares. The facility is expected to come into operation within the next three years.
If there is proper co-ordination between the ports under a PMP, instead of investing more funds at Keamari coal yard, the government should, in the better interest of the local residents and port users, exercise greater corporate social responsibility and look towards preparing to transfer all coal and cement handling to Port Qasim away from densely populated areas.
In the interim, while policymakers mull over what to do, there are short term solutions that the Karachi Port may implement. Merchants take a long time to remove the coal from the port area and this is for economic reasons. It has been learnt that KPT's storage yard at Keamari offers storage said to be at cheaper rates than other locations outside the port.
Any rational importer would keep this cargo at the port until it is required, as moving them outside would be more costly and there are more restrictions imposed due to its environmental hazard. These costs are externalised to the residents in the area in form of impact on health, with short-term medical cost and in the long-term, reduction in their life span.
There is no incentive by officials to increase the charges for the importers as it removes opportunities to secure the coal business. In the light of these gains, the authorities have conveniently turned their backs towards the continuing health and environmental hazards being posed by the KPT's coal storage yard at Keamari.
This ignores medical risks to the local population and material risks to surrounding businesses such as those oils storage. Costs are externalised to others. The KPT may consider increasing the storage charges for the owners of coal and this should lead to speedy evacuation of the cargo at the port area.
This strategy proved to be effective at the port of Chittagong around 2006 where congestion was resolved when the port doubled the charges to the owners of cargo as once mentioned by ex-Chittagong Port Chairman. This increase in charges gives no incentive for the cargo owners as outside storage charges become lower than those in the port. It may well be that the official revenue received by the KPT will be the same or even higher despite the cargo staying a much shorter period at the port.
I commend all public and private sector enterprises who have saved the exchequer by using coal in cement factories, yet my intentions are humble without causing umbrage to any institution. The only compelling reason to pen this column is environmental and fire hazards and the health safety of the residents of the adjoining areas even extending to Clifton.
My main concern was visiting the oil pier, I noticed traces of coal dust on oil tankers berthed on OP-I/II/III and imagined the complexities ie underwriters of ship owners may demand additional risk premium from ship owners for berthing at Karachi, thus it is essential to raise the issue for the discretion of those concerned, who are competent and may be concerned equally, but for reasons best known may be ignoring the hazards.
Sunday, January 23, 2011
Sunday, January 16, 2011
Rotterdam Rules: Carriage of Goods by Sea Act
he shipment of goods by sea under Sea Act, commonly known as COGSA is our statute, governing the rights and responsibilities between shippers of cargo and ship owners regarding ocean shipments to and from Pakistan. Our trade is assumed to be 95% by sea. It is the enactment of the international convention regarding bills of lading, commonly known as the "Hague rules."
We, in Pakistan still rely on outdated carriage of goods Act by Sea 1925. A serious effort was made in 2004-05 to amend the outdated/obsolete carriage of goods act by taking all the stakeholders onboard whilst Director General of Ports and Shipping, Karachi, being the regulatory regime played host to all the stakeholders, ie shippers, carriers, chambers, NTTFC and others, to arrive at a consensus.
The consensus was reached bearing in mind the problems faced by trade and commerce and amended draft rules were submitted to the concerned ministry to enable it to move the bill in the parliament to amend the obsolete act. However, the Ministry of Law and Justice instead of vetting the draft bill, dumped it into to the cold storage with no outcome to-date, thus nullifying all the productive man hours put to revise the bill to address the modern day needs.
It is interesting to note that rest of the world amended the "Hague Rules" in 1968 on the premise that the "Hague Rules" are in favour of ship owners, limiting their liability to trade. The rules were replaced by "Visby" amendments, which replaced "per package" with limitation per kilogramme.
The "Hague Visby Rules" have been in force internationally for over years and performed well, both for the maritime law and the countless parties around the world who have chosen courts and arbitral tribunals, invoking Arbitration Act 1996 as per English law, whereas our Arbitration Act is still that of X/1940, thus international entrepreneurs, signing any contract in Pakistan, insist arbitration in London or Switzerland, having no faith in our obsolete Arbitration Act. My personal experience as arbitrator confirms Arbitral proceedings of contract as per the English Arbitration Law of 1996.
Three developments in the maritime world lead to believe that "Hague Visby Rules" have started showing their age. First, the big increase in container traffic required more serious legislative attention then the simple package/unit tinkering effected in 1968 Visby Protocol.
Secondly, the legal framework for carriage of goods by sea has lagged behind the use of electronic means of communication in the issue and transfer of bills of lading, which are negotiable instrument as per negotiable instrument act. The carriage of goods by Sea Act 1992, provided powers for accommodating electronic instruments in the civilised world, but those powers remained unused for lack of comprehension and clarity.
Finally, increased globalisation of markets required that some accommodation be made, even within the liner market, for contracts agreed freely between parties, with some room of departure from Hague Visby Rules, which originated, in the study of the US Harter Act in the late 19th century.
Large commercial concerns now see the carriage of goods on liner terms not simply as incidents to export, but an integral part of serial and large supply chains, which need flexibility in freedom of contract, while we still follow 1925 Carriage of Goods by Sea Act what to talk about amendments or updating.
The UNICTRAL has developed a new regime known as "Rotterdam Rules" and on Wednesday 23rd September 2009, 16 countries have officially ratified the new UN convention Rotterdam Rules and as of today, 23 countries have ratified or signed document of accession, including US.
The IMMTA local office is concerned that whilst we could not amend COGSA, how we are going to take the onslaught or Rotterdam Rules, thus IMMTA is seriously considering to arrange a workshop at Karachi in March to educate all stakeholders on the Rotterdam Rules and hopefully concerned ministries be educated to comprehend the new convention before submitting the document of accession as the rules must be deliberated before approving the convention.
The most serious issue is changing the bills of lading with transport document, thus prudential regulations have to be amended to make the negotiable instrument act/law to accommodate new requirements. The Rotterdam Rules is the United Nation Convention on contracts for the International Carriage of Goods, wholly or partly by sea, and it is highly complex magnum opus of 96 articles.
The IMMTA organised an international conference at Marbella, Spain, from 19th to 23rd September, 2010. Marlaw was also attended by two commercial maritime personnel of repute from Pakistan, who surely are willing to deliberate and educate the local stakeholders.
The Rotterdam Rules were debated in view of multi-modal transportation of goods in the 21st century, needs solution and liability regime, which is yet to be covered by Tokyo Rules or ICC/ UNCTAD rules, thus it is imperative to evolve a binding effect on liability regime of multi-modal transport operator including freight forwarders.
The IMMTA is of the considered opinion that Rotterdam Rules be implemented despite shortcomings to replace the outdated Hague Visby Rules. The International Road Transport Union is, however, urging the government not to ratify the rules as they do not want to bear any liability.
The Rotterdam Rules provides for changes in the Hague Visby/COGSA regime. It will also apply to all carriage of goods wholly or partly, by sea. The convention extends the statutory regime to the entire period the goods are in the custody of the carrier and its maritime performing parties. It is also interesting that charter parties contract, towage agreements and volume contracts are not covered in the Rotterdam Rules.
The IMMTA local office is of the considered opinion of adopting Rotterdam Rules to address the multi-modal transport in Pakistan. Karachi Chamber of Commerce Shipping Committee in the past had expressed its reservation on freight forwarders, thus implementation of Rotterdam Rules will also be netting freight forwarders in liability regime as a MTO.
It is true that the new rules address all deficiencies, in particular containerisation, extending the rules to contract for the carriage of goods wholly or partly by electronic transfer documents which are accommodated as being functionally equivalent to paper transport documents. The liner market is still regulated by rules and charter parties.
The most intriguing question is that are we ready for Rotterdam Rules? The answer is 'no' as neither the ministry concerned, chambers nor the shipping community has been educated on the new UN Convention Rotterdam Rules, which may eventually replace "Hague Visby Rules".
Let us all ponder seriously as it scares me that some layman in the ministry, simply enjoying foreign trips, may endorse the rules, whilst we are not ready, affecting trade, commerce and liability regime. I very humbly give a wake up call to all and sundry and hope the concerned ministry may take the lead. The Shipping Committee of Karachi Chamber of Commerce will be most willing to extend all co-operation to educate the stake holders.
We, in Pakistan still rely on outdated carriage of goods Act by Sea 1925. A serious effort was made in 2004-05 to amend the outdated/obsolete carriage of goods act by taking all the stakeholders onboard whilst Director General of Ports and Shipping, Karachi, being the regulatory regime played host to all the stakeholders, ie shippers, carriers, chambers, NTTFC and others, to arrive at a consensus.
The consensus was reached bearing in mind the problems faced by trade and commerce and amended draft rules were submitted to the concerned ministry to enable it to move the bill in the parliament to amend the obsolete act. However, the Ministry of Law and Justice instead of vetting the draft bill, dumped it into to the cold storage with no outcome to-date, thus nullifying all the productive man hours put to revise the bill to address the modern day needs.
It is interesting to note that rest of the world amended the "Hague Rules" in 1968 on the premise that the "Hague Rules" are in favour of ship owners, limiting their liability to trade. The rules were replaced by "Visby" amendments, which replaced "per package" with limitation per kilogramme.
The "Hague Visby Rules" have been in force internationally for over years and performed well, both for the maritime law and the countless parties around the world who have chosen courts and arbitral tribunals, invoking Arbitration Act 1996 as per English law, whereas our Arbitration Act is still that of X/1940, thus international entrepreneurs, signing any contract in Pakistan, insist arbitration in London or Switzerland, having no faith in our obsolete Arbitration Act. My personal experience as arbitrator confirms Arbitral proceedings of contract as per the English Arbitration Law of 1996.
Three developments in the maritime world lead to believe that "Hague Visby Rules" have started showing their age. First, the big increase in container traffic required more serious legislative attention then the simple package/unit tinkering effected in 1968 Visby Protocol.
Secondly, the legal framework for carriage of goods by sea has lagged behind the use of electronic means of communication in the issue and transfer of bills of lading, which are negotiable instrument as per negotiable instrument act. The carriage of goods by Sea Act 1992, provided powers for accommodating electronic instruments in the civilised world, but those powers remained unused for lack of comprehension and clarity.
Finally, increased globalisation of markets required that some accommodation be made, even within the liner market, for contracts agreed freely between parties, with some room of departure from Hague Visby Rules, which originated, in the study of the US Harter Act in the late 19th century.
Large commercial concerns now see the carriage of goods on liner terms not simply as incidents to export, but an integral part of serial and large supply chains, which need flexibility in freedom of contract, while we still follow 1925 Carriage of Goods by Sea Act what to talk about amendments or updating.
The UNICTRAL has developed a new regime known as "Rotterdam Rules" and on Wednesday 23rd September 2009, 16 countries have officially ratified the new UN convention Rotterdam Rules and as of today, 23 countries have ratified or signed document of accession, including US.
The IMMTA local office is concerned that whilst we could not amend COGSA, how we are going to take the onslaught or Rotterdam Rules, thus IMMTA is seriously considering to arrange a workshop at Karachi in March to educate all stakeholders on the Rotterdam Rules and hopefully concerned ministries be educated to comprehend the new convention before submitting the document of accession as the rules must be deliberated before approving the convention.
The most serious issue is changing the bills of lading with transport document, thus prudential regulations have to be amended to make the negotiable instrument act/law to accommodate new requirements. The Rotterdam Rules is the United Nation Convention on contracts for the International Carriage of Goods, wholly or partly by sea, and it is highly complex magnum opus of 96 articles.
The IMMTA organised an international conference at Marbella, Spain, from 19th to 23rd September, 2010. Marlaw was also attended by two commercial maritime personnel of repute from Pakistan, who surely are willing to deliberate and educate the local stakeholders.
The Rotterdam Rules were debated in view of multi-modal transportation of goods in the 21st century, needs solution and liability regime, which is yet to be covered by Tokyo Rules or ICC/ UNCTAD rules, thus it is imperative to evolve a binding effect on liability regime of multi-modal transport operator including freight forwarders.
The IMMTA is of the considered opinion that Rotterdam Rules be implemented despite shortcomings to replace the outdated Hague Visby Rules. The International Road Transport Union is, however, urging the government not to ratify the rules as they do not want to bear any liability.
The Rotterdam Rules provides for changes in the Hague Visby/COGSA regime. It will also apply to all carriage of goods wholly or partly, by sea. The convention extends the statutory regime to the entire period the goods are in the custody of the carrier and its maritime performing parties. It is also interesting that charter parties contract, towage agreements and volume contracts are not covered in the Rotterdam Rules.
The IMMTA local office is of the considered opinion of adopting Rotterdam Rules to address the multi-modal transport in Pakistan. Karachi Chamber of Commerce Shipping Committee in the past had expressed its reservation on freight forwarders, thus implementation of Rotterdam Rules will also be netting freight forwarders in liability regime as a MTO.
It is true that the new rules address all deficiencies, in particular containerisation, extending the rules to contract for the carriage of goods wholly or partly by electronic transfer documents which are accommodated as being functionally equivalent to paper transport documents. The liner market is still regulated by rules and charter parties.
The most intriguing question is that are we ready for Rotterdam Rules? The answer is 'no' as neither the ministry concerned, chambers nor the shipping community has been educated on the new UN Convention Rotterdam Rules, which may eventually replace "Hague Visby Rules".
Let us all ponder seriously as it scares me that some layman in the ministry, simply enjoying foreign trips, may endorse the rules, whilst we are not ready, affecting trade, commerce and liability regime. I very humbly give a wake up call to all and sundry and hope the concerned ministry may take the lead. The Shipping Committee of Karachi Chamber of Commerce will be most willing to extend all co-operation to educate the stake holders.
Wednesday, December 15, 2010
Why don't we learn from WikiLeaks?
Pakistan since its inception has a chequered history, as we failed to learn from history. Our leaders never read the saying of "CICERO" who said "to remain ignorant of what happened before, you were born is to remain always a child" how true is this saying, when we find our leadership being exposed by WikiLeaks. The people and media had at large the same perception, which stands now authenticated by WikiLeaks.
The global leadership is now determined to punish the CEO for leaking the truth, as our leaders are reported to have followed the dictates of a Lady Viceroy whilst the exposures have reflected our country as a Banana Republic, but similarly the civilised world is equally following the dictates to punish the web for disclosing the truth.
I can only presume that our leadership has learnt from history its limitation as a guiding signpost and its negative value as a warning sign, whilst history of events does not teach us what to do by showing the most common mistakes that mankind is apt to make and to repeat. The second object lies in the practical value of history "Fools" said Bismarck "say they learn by experience. I prefer to profit by other peoples experience".
There are two roads to the reformation of our present and prospective leaders be it civilian or military-one through misfortunes of their own, the other through misfortunes of others, the former is the most unmistakable, the latter is less painful, the knowledge gained from the study of history/events is the best of all educations for practical life.
The basic remark ascribed to "Pontius Pilate - "what is truth "and often in circumstances that make us wonder why. It is repeatedly used as a smoke screen to mask a manoeuvre, personal or political and to cover an evasion of the issue. Yet the longer I watched the current events of 4 to 5 years in Pakistan, the more I have come to see how many of our troubles arise from the habit, on all sides, of suppressing or distorting what we know quite well is the truth, out of devotion to a cause, an ambition or an institution at bottom, this devotion being inspired by our own interest.
One of our vocal intellectuals Hasan Nisar, made it abundantly clear on media that the trial of CEO of WikiLeaks is nothing but punishing a person who leaked the truth and exposed the big wheels of the global politics. I must also commend the brave Lady Jemima for coming forward to bail a person, who had been well awarded and recognised when it suited the global players.
Loyalty is a noble quality, so long it is not blind and does not exclude the higher loyalty to truth and decency. It pains to see some loyal politicians commenting on the events and terming the leaks as blatant lies, although from the core of their heart, they are aware and convinced of the accuracy described as "a conspirator for mutual inefficiency in governance".
"We use the term power politics as a common usage, but lack of understanding as to where power lies actually and how it is communicated and exercised in our land of the pure. The masses at large blame others for their own misdoings, but partly they are true as leadership and policies are decided abroad due to our economic problems.
The beggars surely cannot be choosers and have to follow the dictates of economic managers, be it RGST or Flood Tax, power rates hike etc. Looking at the situation today, the most disturbing trend in US, Britain and other democratic countries, compared with the past, it seems that, whilst there has been an improvement in some respects, handicaps have increased in other ways and on balance these may be worse.
One factor is an excessive growth of "security mindedness' more bureaucratic often then realistic, so that it is often carried to ludicrous extremes. The issue is causing serious stress on inter-religion harmony and singling out masses on the basis of religion, without discounting the factor that religion has no role at all, but it is exploitation in search of resources by developed nations, thus the under-developed world has to be exploited to control the energy, and mineral resources etc to meet the appetite of developed world.
I am sure that our leaders will be more cautious with powers to be when deliberating on issues of national interest. Let us accept the fact and apologies to the nation for follies committed and now being exposed. There are broadly two schools of thought about leadership.
One has it that leader should lead, the other is he or she should follow. The latter is not as paradoxical as it seems when the government takes careful note of media and public opinion, or scrutinise the views of focus groups, they are adapting themselves to trends and attempting to satisfy demand rather than to direct it.
Sometimes it is the wisest course, what you cannot enforce do not command. We have recently noticed that in our issues of RGST, power hikes, fuel cost etc, public opinion is notoriously resistant to some of the imported brighter ideas of the IMF canvassed by national leaders, who have taken undignified tumbles as result. We are fully aware that in today's world the sovereignty has lost its value due to interdependence of trade and commerce, but self/national dignity is last to be compromised. The living example is how Indians treated Obama on his arrival as there was no line up of President, PM etc. They maintained their dignity, but at the same time, showered the incredible Indian courtesy.
The global leadership is now determined to punish the CEO for leaking the truth, as our leaders are reported to have followed the dictates of a Lady Viceroy whilst the exposures have reflected our country as a Banana Republic, but similarly the civilised world is equally following the dictates to punish the web for disclosing the truth.
I can only presume that our leadership has learnt from history its limitation as a guiding signpost and its negative value as a warning sign, whilst history of events does not teach us what to do by showing the most common mistakes that mankind is apt to make and to repeat. The second object lies in the practical value of history "Fools" said Bismarck "say they learn by experience. I prefer to profit by other peoples experience".
There are two roads to the reformation of our present and prospective leaders be it civilian or military-one through misfortunes of their own, the other through misfortunes of others, the former is the most unmistakable, the latter is less painful, the knowledge gained from the study of history/events is the best of all educations for practical life.
The basic remark ascribed to "Pontius Pilate - "what is truth "and often in circumstances that make us wonder why. It is repeatedly used as a smoke screen to mask a manoeuvre, personal or political and to cover an evasion of the issue. Yet the longer I watched the current events of 4 to 5 years in Pakistan, the more I have come to see how many of our troubles arise from the habit, on all sides, of suppressing or distorting what we know quite well is the truth, out of devotion to a cause, an ambition or an institution at bottom, this devotion being inspired by our own interest.
One of our vocal intellectuals Hasan Nisar, made it abundantly clear on media that the trial of CEO of WikiLeaks is nothing but punishing a person who leaked the truth and exposed the big wheels of the global politics. I must also commend the brave Lady Jemima for coming forward to bail a person, who had been well awarded and recognised when it suited the global players.
Loyalty is a noble quality, so long it is not blind and does not exclude the higher loyalty to truth and decency. It pains to see some loyal politicians commenting on the events and terming the leaks as blatant lies, although from the core of their heart, they are aware and convinced of the accuracy described as "a conspirator for mutual inefficiency in governance".
"We use the term power politics as a common usage, but lack of understanding as to where power lies actually and how it is communicated and exercised in our land of the pure. The masses at large blame others for their own misdoings, but partly they are true as leadership and policies are decided abroad due to our economic problems.
The beggars surely cannot be choosers and have to follow the dictates of economic managers, be it RGST or Flood Tax, power rates hike etc. Looking at the situation today, the most disturbing trend in US, Britain and other democratic countries, compared with the past, it seems that, whilst there has been an improvement in some respects, handicaps have increased in other ways and on balance these may be worse.
One factor is an excessive growth of "security mindedness' more bureaucratic often then realistic, so that it is often carried to ludicrous extremes. The issue is causing serious stress on inter-religion harmony and singling out masses on the basis of religion, without discounting the factor that religion has no role at all, but it is exploitation in search of resources by developed nations, thus the under-developed world has to be exploited to control the energy, and mineral resources etc to meet the appetite of developed world.
I am sure that our leaders will be more cautious with powers to be when deliberating on issues of national interest. Let us accept the fact and apologies to the nation for follies committed and now being exposed. There are broadly two schools of thought about leadership.
One has it that leader should lead, the other is he or she should follow. The latter is not as paradoxical as it seems when the government takes careful note of media and public opinion, or scrutinise the views of focus groups, they are adapting themselves to trends and attempting to satisfy demand rather than to direct it.
Sometimes it is the wisest course, what you cannot enforce do not command. We have recently noticed that in our issues of RGST, power hikes, fuel cost etc, public opinion is notoriously resistant to some of the imported brighter ideas of the IMF canvassed by national leaders, who have taken undignified tumbles as result. We are fully aware that in today's world the sovereignty has lost its value due to interdependence of trade and commerce, but self/national dignity is last to be compromised. The living example is how Indians treated Obama on his arrival as there was no line up of President, PM etc. They maintained their dignity, but at the same time, showered the incredible Indian courtesy.
Sunday, November 28, 2010
Port master plan
From the time of Alexander the Great, it is recorded in history that Pakistan's geographical location is strategic for the control of resources and military power. It is situated at the crossroads from Europe to Asia. Armies have used Pakistan as a launching pad to conquer lands in India and beyond. Today, there is war of a different kind, an economic one.
Pakistan offers overland access to the countries of Central Asia and Western China to serve these territories for their flow of goods, such flows are important to the development of these countries. Pakistan is of economic strategic importance to Central Asia and western China. Pakistan's economic fate is locked in one with these Central Asian countries. So much for the rhetoric. Action is needed for Pakistan to take up its role as a strategic corridor to serve the territories.
To capitalise on the full strategic advantage, our leaders need a comprehensive plan. There needs to be a full-scale infrastructure to support the movement of goods and people from the shores of Pakistan to the landlocked areas of Central Asia and beyond. There is a need for ports to serve as the gateway for goods and a need for the required transport infrastructure to move cargo. Needless to say, there is the need for supporting systems, and an educated workforce to support our vision.
Most of all, there must the right policies. In respect of ports, our Honourable Prime Minister / Minister of Ports & Shipping stressed, "Following examples of various developing countries, the government is always seeking new avenues to facilitate and encourage foreign investment into the country through the provision of incentives and business-friendly policies in the shipping and port sector."
I was a student and now am a practitioner in the maritime industry which is a evolving decipline and I shall focus on the area I have some vision ie the development of ports in Pakistan. In this respect, the Government of Pakistan started with the assistance of World Bank and their Transport specialist Durrani, the National Trade Corridor Improvement Program (NTCIP) in[June 2009 to improve the logistics infrastructure of Pakistan, with a view to enhance connectivity and boost trade in the South Asia-Central Asian region.
One of the key initiatives under the NTCIP is to develop a Port Master Plan (PMP) to optimise the port development requirements and identify short-term (2011 to 2015) and long-term (2015 to 2030) operational requirements, port infrastructure facilities and setting a rational indicative project investment programs, prioritising development objectives and optimising resources. There has been no official announcement of the stage of the PMP.
According to media report and World Bank sources, World Bank is said to have completed the technical and financial evaluation of the Ports Master plan. The contract negotiations for the project would soon begin between the Government and a consultant firm. The study is financed under the second trade and transportation facilitation project and the procurement is still in process.
According to World Bank sources, all procurement of goods and services under WB - supported projects are undertaken by the authority involved in implementation ie the concerned ministry or department responsible for the implementation. Since, the implementation is at the discretion of the concerned ministry, thus consultants and director will be appointed by ministry adhering to PPRA 2004. It must be clearly understood that the funding is not a grant, but has to be paid back. It is assumed that advertisement will be made accordingly.
It is imperative to carry out such study as it is overdue and it is feared that that in absence of such study excessive or over capacity development may take place. Our port planners and Managers are devoid of any electronic data processing in short-term port simulation and long-range planning, thus world Bank program of Port Master Plan will assist our planners for the next 25/30 years development.
I, was amazed to see the news item on 20th November, that Karachi Port will accommodate post panamax generation of vessels of 100,000 dead-weight tons as the berth draft has been increased to 16 meter, however there is no mention of the channel depth and at the same time, it is intriguing that Karachi Deep Water Port of 16 meter draft is being built. There appears to be some misstatement or reporting error. If true as reported in such a situation Port Master Plan necessity has increased manifold so that adequate capacity planning be forecasted. The PMP is in limbo, thus needs to be expedited.
Pakistan currently has three major ports, Karachi, Gwadar and Port Qasim, each under a different regulating authorities and reporting to the Ministry of Ports of Shipping. Together these two ports handled 2.1 million TEUs (twenty foot equivalent boxes) in 2009. To put things into perspective, Pakistan has a population of 170 million and our ports handling 2.1 million TEUs.
India with a population of 1.1 billion handled 7 million TEUs. The reason for this favourable disproportionate figure is due to the forward-looking policies of Pakistan which treats investors right and that we have an orderly development of port infrastructure, through Public Private Partnerships (PPP). I, have restrained to discuss Gwadar Port for obvious reasons, being subjudice.
We are uncertain at this moment, what is the stage of the PMP ie whether it is still being pursued or that more thinking is necessary. In the meantime, there is no co-ordinated development of facilities, each left to their own devices, having different visions and disparate plans. Investment decisions and expansion are made individually and sometime indiscriminately without central co-ordination's. One example is the planned conversion of general cargo berths at the Karachi Port into container terminal facilities while the execution of the Pakistan Deep Water Container Port project expected to cost US $1.5 billion is being executed. KPT will be investing close to US $1 billion to build the breakwater, quay wall, dredging and reclamation and the connectivity (road and bridge) infrastructure while the private investor will invest US $500 million for phase I. KPT investment will serve Phase I and two future phase, which will be executed depending on demand. Without clear thought and policy decision-making, in the long run, there is a risk of overbuilding, with catastrophic impact for the nation.
In a system of PPP, it is crucial for any government to have the right policy strategies in place to attract and, most important, maintain investors interest in our country. Investors who cannot see a clear policy strategy will put their money elsewhere. Government policies should be aimed at an orderly development of infrastructure. Especially with port infrastructure, investments decisions are not made lightly and involved hundreds of millions of dollars on the part of the investor.
With PPP, the government or the port authorities, are partners and co-investors, pouring their part of the hundreds of millions of dollars. Without a serious plan of orderly development, the government having poured such mega-dollars, building the basic infrastructure such as breakwater, dredging, may land ourselves in a situation where investors do not find it viable to participate as an operator under PPP.
In the manufacturing and logistics industry, there is the concept of just-in-time as the most efficient manner of allocating resources. The concept envisage raw materials arriving just in time at the factory floor for production to take place.
Material arriving too early would take up warehouse and factory space, which cost rental, insurance and other storage costs. Materials arriving too late will result in underutilisation of production capacity and loss of sales. Therefore, planning is essential such that materials arrived just in time.
JIT could be applied to the timely development of port infrastructure. In this case, it is even more critical as overdevelopment could result in mega-losses to investors who will lose interest in investing in a country. Untimely underdevelopment will result in loss of economic opportunities for the nation. Ideally, investment infrastructure should be just in time. JIT involves the need for accurate forecasting of demand and building ahead to ensure that facilities are available when needed.
Any Port Master Plan of Pakistan should envisage the proper co-ordination of port infrastructure development. Such development must cater for the interest of investors in such infrastructure, the port authority representing the nation and support the long term economic development of Pakistan. In the context of such infrastructure development, there has been initiatives to build container terminal facilities in the Karachi Port and Port Qasim.
Terminal II of Port Qasim is expected to completed and operational soon. Karachi Port Trust is in the midst of executing the development of the Pakistan Deep Water Container Port (PDWCP) at Keamari Groyne. These developments will bring onstream huge facilities in the next five years and should serve to put Pakistan on the regional maritime map. These facilities involved billions of dollars, after serious consideration by all concerned -investors, governments, and port authorities.
Having poured in billions of dollars, investors do not wish to see a disorderly and disparate expansion of excessive facilities only to drive the revenue down to a point where they see their investment. Experience in the other parts of the world have shown that a disorderly expansion of facilities will lead to dangerous trends with disastrous impact.
Firstly, existing operators will adjust prices downwards to cater for their short term interests. Secondly, lower prices will mean lower royalties for the government and the port authority. Thirdly, such a downward spiral will translate into lower revenue in the form of profit tax, and other taxes related to prices of logistics services. Fourthly and most important, lower revenue collection will result in much lower funding available to the port authority and government for the development of future infrastructure.
Fifthly, the downward spiral in revenue may lead to a point where investors find it unviable to bid for future phases of a container port. This is economically disastrous, where the government has already sunked in mega-sums on the basic structure, which cost are to be spread over a few phases. In summary, one can say that a disorderly expansion of port infrastructure will only serve to waste money but will also squander the golden opportunity of our strategic location endowed upon us by the Almighty.
The solution to this could be a trigger rule adopted by those who direct the strategic policies of port development as seen in Korea. In the years prior to 2005, Korea suffered from excessive supply of container terminal infrastructure, resulting is total lack of interest from private operators in their PPP arrangement.
The scenario was so chronic that the Korean government had to find creative ways to utililise such facilities, turning tracts of container handling space into movie studios, resulting in a reputation of Korean movies in Asia today. The lessons were painful and Korea has today implemented a trigger rule ie that new facilities will be developed in line with market. When capacity reached a certain strategic level, say 70%, new facilities will be developed.
I, am of the opinion that concerned Ministry, Planning Commission must put their heads together with Port Consultants of repute to ensure that just in time philosophy and strategic level of 70% be followed to avert surplus capacity. The development of at least Karachi and Port Qasim be co-ordinated and monitored by planners. Port Management is a very complex subject today and it requires expertise in various fields related to ports, be it planning, bench marking in Port cost or qualitative requirements.
Despite 10% contraction of container throughput in 2009, drewry has forecasted containerised growth in South Asia 4.7%, whilst the Far East and Middle East to grow by 4.3%. Most of the loading terminal operators are said to be adding capacity to their network by 2014. It is also opined that global terminal operators scope to achieve organic throughput growth will be limited by the recession and its impact on world GDP growth, thus our planners must take into account the Drewry's most authentic forecast till 2015 and our GDP of 1% for creating additional capacity. The planners of KPT has to bear in mind shifting of 4 mill tons cement and coal initially in phase I when PIBT terminal at PQA will be operational by 2012/2013 and fertiliser to FAP terminal as same is now operational at PQA.
The planners must ensure that instead of KPT and PQA competing each other, they may co-ordinate and complement each other by ensuring same tariff regime, as the case in India where tariff authority of major ports ( TAMP) is responsible for uniform tariff. It is equally essential to bear in mind that ISAF cargo adding 3/400,000 TEUS will also be gone, once USA pulls out of Afghanistan. Planners must ponder professionally as opportunities are like sunrise, if you wait too long you can miss them. Excellence in profession is not an exception, it is a prevailing attitude that our planners have to bear in mind. Nine tenth of wisdom consists in being wise in time as President Roosevelt said.
Pakistan offers overland access to the countries of Central Asia and Western China to serve these territories for their flow of goods, such flows are important to the development of these countries. Pakistan is of economic strategic importance to Central Asia and western China. Pakistan's economic fate is locked in one with these Central Asian countries. So much for the rhetoric. Action is needed for Pakistan to take up its role as a strategic corridor to serve the territories.
To capitalise on the full strategic advantage, our leaders need a comprehensive plan. There needs to be a full-scale infrastructure to support the movement of goods and people from the shores of Pakistan to the landlocked areas of Central Asia and beyond. There is a need for ports to serve as the gateway for goods and a need for the required transport infrastructure to move cargo. Needless to say, there is the need for supporting systems, and an educated workforce to support our vision.
Most of all, there must the right policies. In respect of ports, our Honourable Prime Minister / Minister of Ports & Shipping stressed, "Following examples of various developing countries, the government is always seeking new avenues to facilitate and encourage foreign investment into the country through the provision of incentives and business-friendly policies in the shipping and port sector."
I was a student and now am a practitioner in the maritime industry which is a evolving decipline and I shall focus on the area I have some vision ie the development of ports in Pakistan. In this respect, the Government of Pakistan started with the assistance of World Bank and their Transport specialist Durrani, the National Trade Corridor Improvement Program (NTCIP) in[June 2009 to improve the logistics infrastructure of Pakistan, with a view to enhance connectivity and boost trade in the South Asia-Central Asian region.
One of the key initiatives under the NTCIP is to develop a Port Master Plan (PMP) to optimise the port development requirements and identify short-term (2011 to 2015) and long-term (2015 to 2030) operational requirements, port infrastructure facilities and setting a rational indicative project investment programs, prioritising development objectives and optimising resources. There has been no official announcement of the stage of the PMP.
According to media report and World Bank sources, World Bank is said to have completed the technical and financial evaluation of the Ports Master plan. The contract negotiations for the project would soon begin between the Government and a consultant firm. The study is financed under the second trade and transportation facilitation project and the procurement is still in process.
According to World Bank sources, all procurement of goods and services under WB - supported projects are undertaken by the authority involved in implementation ie the concerned ministry or department responsible for the implementation. Since, the implementation is at the discretion of the concerned ministry, thus consultants and director will be appointed by ministry adhering to PPRA 2004. It must be clearly understood that the funding is not a grant, but has to be paid back. It is assumed that advertisement will be made accordingly.
It is imperative to carry out such study as it is overdue and it is feared that that in absence of such study excessive or over capacity development may take place. Our port planners and Managers are devoid of any electronic data processing in short-term port simulation and long-range planning, thus world Bank program of Port Master Plan will assist our planners for the next 25/30 years development.
I, was amazed to see the news item on 20th November, that Karachi Port will accommodate post panamax generation of vessels of 100,000 dead-weight tons as the berth draft has been increased to 16 meter, however there is no mention of the channel depth and at the same time, it is intriguing that Karachi Deep Water Port of 16 meter draft is being built. There appears to be some misstatement or reporting error. If true as reported in such a situation Port Master Plan necessity has increased manifold so that adequate capacity planning be forecasted. The PMP is in limbo, thus needs to be expedited.
Pakistan currently has three major ports, Karachi, Gwadar and Port Qasim, each under a different regulating authorities and reporting to the Ministry of Ports of Shipping. Together these two ports handled 2.1 million TEUs (twenty foot equivalent boxes) in 2009. To put things into perspective, Pakistan has a population of 170 million and our ports handling 2.1 million TEUs.
India with a population of 1.1 billion handled 7 million TEUs. The reason for this favourable disproportionate figure is due to the forward-looking policies of Pakistan which treats investors right and that we have an orderly development of port infrastructure, through Public Private Partnerships (PPP). I, have restrained to discuss Gwadar Port for obvious reasons, being subjudice.
We are uncertain at this moment, what is the stage of the PMP ie whether it is still being pursued or that more thinking is necessary. In the meantime, there is no co-ordinated development of facilities, each left to their own devices, having different visions and disparate plans. Investment decisions and expansion are made individually and sometime indiscriminately without central co-ordination's. One example is the planned conversion of general cargo berths at the Karachi Port into container terminal facilities while the execution of the Pakistan Deep Water Container Port project expected to cost US $1.5 billion is being executed. KPT will be investing close to US $1 billion to build the breakwater, quay wall, dredging and reclamation and the connectivity (road and bridge) infrastructure while the private investor will invest US $500 million for phase I. KPT investment will serve Phase I and two future phase, which will be executed depending on demand. Without clear thought and policy decision-making, in the long run, there is a risk of overbuilding, with catastrophic impact for the nation.
In a system of PPP, it is crucial for any government to have the right policy strategies in place to attract and, most important, maintain investors interest in our country. Investors who cannot see a clear policy strategy will put their money elsewhere. Government policies should be aimed at an orderly development of infrastructure. Especially with port infrastructure, investments decisions are not made lightly and involved hundreds of millions of dollars on the part of the investor.
With PPP, the government or the port authorities, are partners and co-investors, pouring their part of the hundreds of millions of dollars. Without a serious plan of orderly development, the government having poured such mega-dollars, building the basic infrastructure such as breakwater, dredging, may land ourselves in a situation where investors do not find it viable to participate as an operator under PPP.
In the manufacturing and logistics industry, there is the concept of just-in-time as the most efficient manner of allocating resources. The concept envisage raw materials arriving just in time at the factory floor for production to take place.
Material arriving too early would take up warehouse and factory space, which cost rental, insurance and other storage costs. Materials arriving too late will result in underutilisation of production capacity and loss of sales. Therefore, planning is essential such that materials arrived just in time.
JIT could be applied to the timely development of port infrastructure. In this case, it is even more critical as overdevelopment could result in mega-losses to investors who will lose interest in investing in a country. Untimely underdevelopment will result in loss of economic opportunities for the nation. Ideally, investment infrastructure should be just in time. JIT involves the need for accurate forecasting of demand and building ahead to ensure that facilities are available when needed.
Any Port Master Plan of Pakistan should envisage the proper co-ordination of port infrastructure development. Such development must cater for the interest of investors in such infrastructure, the port authority representing the nation and support the long term economic development of Pakistan. In the context of such infrastructure development, there has been initiatives to build container terminal facilities in the Karachi Port and Port Qasim.
Terminal II of Port Qasim is expected to completed and operational soon. Karachi Port Trust is in the midst of executing the development of the Pakistan Deep Water Container Port (PDWCP) at Keamari Groyne. These developments will bring onstream huge facilities in the next five years and should serve to put Pakistan on the regional maritime map. These facilities involved billions of dollars, after serious consideration by all concerned -investors, governments, and port authorities.
Having poured in billions of dollars, investors do not wish to see a disorderly and disparate expansion of excessive facilities only to drive the revenue down to a point where they see their investment. Experience in the other parts of the world have shown that a disorderly expansion of facilities will lead to dangerous trends with disastrous impact.
Firstly, existing operators will adjust prices downwards to cater for their short term interests. Secondly, lower prices will mean lower royalties for the government and the port authority. Thirdly, such a downward spiral will translate into lower revenue in the form of profit tax, and other taxes related to prices of logistics services. Fourthly and most important, lower revenue collection will result in much lower funding available to the port authority and government for the development of future infrastructure.
Fifthly, the downward spiral in revenue may lead to a point where investors find it unviable to bid for future phases of a container port. This is economically disastrous, where the government has already sunked in mega-sums on the basic structure, which cost are to be spread over a few phases. In summary, one can say that a disorderly expansion of port infrastructure will only serve to waste money but will also squander the golden opportunity of our strategic location endowed upon us by the Almighty.
The solution to this could be a trigger rule adopted by those who direct the strategic policies of port development as seen in Korea. In the years prior to 2005, Korea suffered from excessive supply of container terminal infrastructure, resulting is total lack of interest from private operators in their PPP arrangement.
The scenario was so chronic that the Korean government had to find creative ways to utililise such facilities, turning tracts of container handling space into movie studios, resulting in a reputation of Korean movies in Asia today. The lessons were painful and Korea has today implemented a trigger rule ie that new facilities will be developed in line with market. When capacity reached a certain strategic level, say 70%, new facilities will be developed.
I, am of the opinion that concerned Ministry, Planning Commission must put their heads together with Port Consultants of repute to ensure that just in time philosophy and strategic level of 70% be followed to avert surplus capacity. The development of at least Karachi and Port Qasim be co-ordinated and monitored by planners. Port Management is a very complex subject today and it requires expertise in various fields related to ports, be it planning, bench marking in Port cost or qualitative requirements.
Despite 10% contraction of container throughput in 2009, drewry has forecasted containerised growth in South Asia 4.7%, whilst the Far East and Middle East to grow by 4.3%. Most of the loading terminal operators are said to be adding capacity to their network by 2014. It is also opined that global terminal operators scope to achieve organic throughput growth will be limited by the recession and its impact on world GDP growth, thus our planners must take into account the Drewry's most authentic forecast till 2015 and our GDP of 1% for creating additional capacity. The planners of KPT has to bear in mind shifting of 4 mill tons cement and coal initially in phase I when PIBT terminal at PQA will be operational by 2012/2013 and fertiliser to FAP terminal as same is now operational at PQA.
The planners must ensure that instead of KPT and PQA competing each other, they may co-ordinate and complement each other by ensuring same tariff regime, as the case in India where tariff authority of major ports ( TAMP) is responsible for uniform tariff. It is equally essential to bear in mind that ISAF cargo adding 3/400,000 TEUS will also be gone, once USA pulls out of Afghanistan. Planners must ponder professionally as opportunities are like sunrise, if you wait too long you can miss them. Excellence in profession is not an exception, it is a prevailing attitude that our planners have to bear in mind. Nine tenth of wisdom consists in being wise in time as President Roosevelt said.
Monday, September 20, 2010
Let us treat the seafarers with dignity
When I joined foreign merchant navy cadet training ship after my graduation as a cadet in 1963, life at sea was different. As a young entrant it was always very exciting to call at new far away ports, see new lands, meet new people and, of course, get to know about their history and culture. By choice of our unique profession, we contributed to the world trade, but in the process, made new friends. Almost 90% of the world trade is still sea-borne.
How many of us ever thought of the fact that if all the sea-going ships were to be tied up in ports for merely two weeks, we would probably find the supermarket shelves empty. Today's hectic modern lifestyle could come to a standstill.
The subject of this article is about the seafarers, who keep these ships operating all over the world. If one wants to single out a community that has contributed more than any other to the cause of international trade and commerce, then it has to be the seafarers. This is a community that remains out at sea, away from their near and dear ones for months at a time. There is no denying that it is their profession by their own choice, but in the process they contribute so much for the cause of international trade, commerce and communications. This, in turn, gives rise to friendship and closer relationship amongst nations. In today's world of open door competition, seafarers from several developing countries work together on ships in the spirit of friendship and brotherhood. In recognition of their special role, the seafaring community had always been treated with love, affection and respect. Ports around the world used to have recreational facilities to provide a home away from home.
Unfortunately, things have changed. There are two factors. An incident in the year 2001 commonly referred to as 9/11 has, perhaps, caused more change than anything else. Terrorists' actions in the US, Kenya, Spain, Bali, Pakistan, India and many other places claimed thousands of innocent lives and took away our peace of mind. The terrorist threats continue to exist and nobody knows for certain when and where the next will occur. Everyone has to be on guard to deny any further chance to the terrorists. However, we must not suffer from any terrorist phobia.
If we give up our modern lifestyle and do not enjoy the fruits of the modern civilisation built over ages, then we help the terrorists achieve their goals. This is one reason why the United Nations General Assembly Resolution A/RES/57/219, "Protection of human rights and fundamental freedoms while countering terrorism," affirms that states must ensure that any measure taken to combat terrorism complies with their obligations under international law, in particular international human rights, refugee and humanitarian law. Not granting shore leave to innocent seafarers in the name of security threat is nothing other than depriving the seafarers of their age-old tradition of recreational facility. It amounts to violation of human rights and dignity. The US stands at top, whilst India and Pakistan, despite Shipping Protocol signed in 2006 deny shore leave to seafarers.
The other factor is a serious nature of high profile ship related pollution cases around the world. Rightly or wrongly in most cases the master and chief engineer of the subject vessel is immediately arrested and put behind bars like a criminal. The seafarers are kept in detention for days together without even any formal charge and in some cases without any access to lawyers or solicitors. This is certainly gross violation of human rights.
The concept of natural justice of being innocent unless proved guilty is brushed aside and it falls upon the seafarers to prove that they are not guilty. The local authorities are always very eager to look to be doing something. The easiest thing to do is to put the master and chief engineer behind bars. Sometimes the marine professionals are the easiest scapegoats for the failure of others, thereby diverting the attention when the issue is fresh and burning.
The tanker "Prestige" suffered structural damage in heavy weather and the master's request for a place of refuge was refused. Instead the Spanish authorities towed the vessel 133 miles away from the coast of Spain, exposing the damaged vessel to further perils of the sea for six days later, she sank. In the opinion of salvage experts, in a suitable shelter, the vessel could have transferred most of her cargo to other vessels and any limited spill out could be contained and later recovered/skimmed off.
Nobody questioned the decision of the local authority; instead the master was arrested immediately despite having complied with all the orders and instructions. The suffering that Capt. Apostolos Mangouras underwent in Spanish jail is known to all. In any case, the "Prestige" incident taught us two important things. It has now become a part of the SOLAS for coastal states to have designated shelters. It also identified the need for pre-arranged command structure, which the UK has now done in the shape of a SOSREP.
In case of the tanker " Tasman Spirit," which was under advice and guidance of fully licensed local pilot, it is again the master and crew of the vessel, who were remanded in police custody immediately after the incident as if they conspired and put the ship aground. It was later revealed that Pakistan was not even a party to Civil Liability Convention and the arrest was an effort to ensure that damages can be recovered to cover their incompetence. The innocent seafarers had to suffer for shortcoming on part of the government officials. There are many more such incidents where seafarers had to suffer for no fault of their own. The enquiry, conducted by professionals, has not been made public as yet, nor record of any recovery.
Now we look at another incident - this time it is not a ship but an oilrig named "Deep sea Horizon" that exploded in the Gulf of Mexico off the coast of Louisiana, United States. The blast not only killed eleven persons but also caused the worst ever pollution known in human history. I have not heard of any police arresting any master, engineer or any other person.
However, all measures have been taken to stop further pollution, clean up the spill and compensate all qrr3d53e. Inquiry and investigations are under way. The cause of the blast will be found and remedial action will be taken to avoid such explosion. It does not rule out punitive measures against any individual found to be negligent. That is the right way forward.
Denial of shore leave and locking up ship's officers as the first action for any pollution incident is wrong. Being aware that seafarers work and live on ships involved in the international trade and that access to shore facilities and shore leave are vital elements of the seafarers' general well being, therefore, to the achievement of safer shipping and cleaner oceans, all coastal states should make recreational facilities available for the seafarers and allow them normal shore leave facility unless there is specific reason not to grant such facility to any individual. Asking them to obtain prior visa from the seafarers country of origin amounts to denial of shore leave because sudden change of programme may lead to unexpected destinations for which they were not prepared at the start of the voyage.
Criminalization and victimisation of seafarers for no fault of theirs is barbaric and inhuman. With regard to the incident of "Prestige," Captain Roger MacDonald said "It should be of great concern to every European Union national that a democratically elected European government got away with the locking up a ship master for three months in a high security prison without charge and without access to lawyers". The Secretary General of the International Maritime Organisation said 'punishing treatment meted out to seafarers, on whom international sea-trade and prosperity of nations depend, was not only disrespectful, wrong, unfair and unjust but also contrary to international law.
The United Nations Convention on the Law of the Sea is the paramount convention on all sea-related matters. We should, therefore, try to achieve our primary objectives through UNCLOS82. Article 73 and 292 of UNCLOS-82 have clear provisions against unreasonable detention of seafarers and for their release against suitable bond or guarantee. Article 230 is very specific that monetary penalties may be imposed to control pollution of marine environment except in the case of a willful serious act of pollution in the territorial sea.
In the field of marine environment, there are a number of international instruments to deal with various aspects of ship related marine pollution. They range from the subject of control and prevention of discharge by oil, chemicals, garbage, sewage and even exhaust by different annexes of the MARPOL-73/78; There is OPRC-90 that deals with preparedness and response (national as well as regional) in case of accidental pollution (how to contain and restrict and then the clean-up); There is Intervention-69 that gives powers to a coastal state to take pre-emptive precautionary action should it feel threatened by an accident or incident; In the field of compensation regime it has got CLC-69/ 76/92 to pay for, by the carrier; There is Fund-71/ 76/ 92/2000/2003 to pay for on top of CLC. The importance of protecting marine environment has gone to the extent of imposing restrictions and limitations on exchange of ballast water and use of anti-fouling paint on ships. These instruments are the outcome of lead given in the UNCLOS-82.
There should be no need for putting people behind bar unless there is evidence of deliberate action or willful misconduct. Arresting people for cheap publicity or popularity should be discouraged. The recent surge in piracy at the horn of Africa has taken toll of many seafarers, recently a Pakistani Capt. Jaffery was killed being a hostage. The pirates are operating whilst the world navies combined joint task force - Horn of Africa (CJTF - HOA) are guarding Gulf of Aden, Horn of Africa, Arabian Sea up to Sallalah, but piracy remains deadly for seafarers, a real mind boggling issue to understand who is sponsor and beneficiary of piracy, but victims are seafarers only in this chess game, whilst settlement of release of hostage and ship are said to be made by London lawyers and ransom is collected.
On the occasion of the World Maritime Day, the Secretary General of IMO said in a message to the world's seafarers "Our intention is to pay tribute to you, the world's 1.5 million seafarers - men and women from all over the globe".
As a seafarer, I say the best tribute we can pay to the seafarers is to do something which will prevent them being bullied in future. I call upon both IMO and ILO to work together to prepare a draft document and then call a diplomatic conference to adopt a convention under title "Fair treatment to Seafarers". The document, with all due respect to the sovereignty of every state, should make it binding upon them to ensure that visiting seafarers are given shore-leave (without insisting on prior visa) and that states should provide such recreational facilities as are considered appropriate to their history and culture except where there is reason for not granting such shore leave.
In case of accidents or incidents resulting in loss or damage to human life, property or environment, the state, which has the jurisdiction, may inquire, investigate and deal with the matter in a manner acceptable under international treaties, practice and procedures. The flag state of the vessel should be involved in the process of investigation. Unilateral arrest of seafarers should be avoided unless there is clear evidence of deliberate misdeeds. Where arrests are already made, the seafarers should be treated with dignity and be provided with full access to legal support for grant of bail. Unless criminal negligence is established, monetary fine/ penalty should be preferred to jail sentence.
How many of us ever thought of the fact that if all the sea-going ships were to be tied up in ports for merely two weeks, we would probably find the supermarket shelves empty. Today's hectic modern lifestyle could come to a standstill.
The subject of this article is about the seafarers, who keep these ships operating all over the world. If one wants to single out a community that has contributed more than any other to the cause of international trade and commerce, then it has to be the seafarers. This is a community that remains out at sea, away from their near and dear ones for months at a time. There is no denying that it is their profession by their own choice, but in the process they contribute so much for the cause of international trade, commerce and communications. This, in turn, gives rise to friendship and closer relationship amongst nations. In today's world of open door competition, seafarers from several developing countries work together on ships in the spirit of friendship and brotherhood. In recognition of their special role, the seafaring community had always been treated with love, affection and respect. Ports around the world used to have recreational facilities to provide a home away from home.
Unfortunately, things have changed. There are two factors. An incident in the year 2001 commonly referred to as 9/11 has, perhaps, caused more change than anything else. Terrorists' actions in the US, Kenya, Spain, Bali, Pakistan, India and many other places claimed thousands of innocent lives and took away our peace of mind. The terrorist threats continue to exist and nobody knows for certain when and where the next will occur. Everyone has to be on guard to deny any further chance to the terrorists. However, we must not suffer from any terrorist phobia.
If we give up our modern lifestyle and do not enjoy the fruits of the modern civilisation built over ages, then we help the terrorists achieve their goals. This is one reason why the United Nations General Assembly Resolution A/RES/57/219, "Protection of human rights and fundamental freedoms while countering terrorism," affirms that states must ensure that any measure taken to combat terrorism complies with their obligations under international law, in particular international human rights, refugee and humanitarian law. Not granting shore leave to innocent seafarers in the name of security threat is nothing other than depriving the seafarers of their age-old tradition of recreational facility. It amounts to violation of human rights and dignity. The US stands at top, whilst India and Pakistan, despite Shipping Protocol signed in 2006 deny shore leave to seafarers.
The other factor is a serious nature of high profile ship related pollution cases around the world. Rightly or wrongly in most cases the master and chief engineer of the subject vessel is immediately arrested and put behind bars like a criminal. The seafarers are kept in detention for days together without even any formal charge and in some cases without any access to lawyers or solicitors. This is certainly gross violation of human rights.
The concept of natural justice of being innocent unless proved guilty is brushed aside and it falls upon the seafarers to prove that they are not guilty. The local authorities are always very eager to look to be doing something. The easiest thing to do is to put the master and chief engineer behind bars. Sometimes the marine professionals are the easiest scapegoats for the failure of others, thereby diverting the attention when the issue is fresh and burning.
The tanker "Prestige" suffered structural damage in heavy weather and the master's request for a place of refuge was refused. Instead the Spanish authorities towed the vessel 133 miles away from the coast of Spain, exposing the damaged vessel to further perils of the sea for six days later, she sank. In the opinion of salvage experts, in a suitable shelter, the vessel could have transferred most of her cargo to other vessels and any limited spill out could be contained and later recovered/skimmed off.
Nobody questioned the decision of the local authority; instead the master was arrested immediately despite having complied with all the orders and instructions. The suffering that Capt. Apostolos Mangouras underwent in Spanish jail is known to all. In any case, the "Prestige" incident taught us two important things. It has now become a part of the SOLAS for coastal states to have designated shelters. It also identified the need for pre-arranged command structure, which the UK has now done in the shape of a SOSREP.
In case of the tanker " Tasman Spirit," which was under advice and guidance of fully licensed local pilot, it is again the master and crew of the vessel, who were remanded in police custody immediately after the incident as if they conspired and put the ship aground. It was later revealed that Pakistan was not even a party to Civil Liability Convention and the arrest was an effort to ensure that damages can be recovered to cover their incompetence. The innocent seafarers had to suffer for shortcoming on part of the government officials. There are many more such incidents where seafarers had to suffer for no fault of their own. The enquiry, conducted by professionals, has not been made public as yet, nor record of any recovery.
Now we look at another incident - this time it is not a ship but an oilrig named "Deep sea Horizon" that exploded in the Gulf of Mexico off the coast of Louisiana, United States. The blast not only killed eleven persons but also caused the worst ever pollution known in human history. I have not heard of any police arresting any master, engineer or any other person.
However, all measures have been taken to stop further pollution, clean up the spill and compensate all qrr3d53e. Inquiry and investigations are under way. The cause of the blast will be found and remedial action will be taken to avoid such explosion. It does not rule out punitive measures against any individual found to be negligent. That is the right way forward.
Denial of shore leave and locking up ship's officers as the first action for any pollution incident is wrong. Being aware that seafarers work and live on ships involved in the international trade and that access to shore facilities and shore leave are vital elements of the seafarers' general well being, therefore, to the achievement of safer shipping and cleaner oceans, all coastal states should make recreational facilities available for the seafarers and allow them normal shore leave facility unless there is specific reason not to grant such facility to any individual. Asking them to obtain prior visa from the seafarers country of origin amounts to denial of shore leave because sudden change of programme may lead to unexpected destinations for which they were not prepared at the start of the voyage.
Criminalization and victimisation of seafarers for no fault of theirs is barbaric and inhuman. With regard to the incident of "Prestige," Captain Roger MacDonald said "It should be of great concern to every European Union national that a democratically elected European government got away with the locking up a ship master for three months in a high security prison without charge and without access to lawyers". The Secretary General of the International Maritime Organisation said 'punishing treatment meted out to seafarers, on whom international sea-trade and prosperity of nations depend, was not only disrespectful, wrong, unfair and unjust but also contrary to international law.
The United Nations Convention on the Law of the Sea is the paramount convention on all sea-related matters. We should, therefore, try to achieve our primary objectives through UNCLOS82. Article 73 and 292 of UNCLOS-82 have clear provisions against unreasonable detention of seafarers and for their release against suitable bond or guarantee. Article 230 is very specific that monetary penalties may be imposed to control pollution of marine environment except in the case of a willful serious act of pollution in the territorial sea.
In the field of marine environment, there are a number of international instruments to deal with various aspects of ship related marine pollution. They range from the subject of control and prevention of discharge by oil, chemicals, garbage, sewage and even exhaust by different annexes of the MARPOL-73/78; There is OPRC-90 that deals with preparedness and response (national as well as regional) in case of accidental pollution (how to contain and restrict and then the clean-up); There is Intervention-69 that gives powers to a coastal state to take pre-emptive precautionary action should it feel threatened by an accident or incident; In the field of compensation regime it has got CLC-69/ 76/92 to pay for, by the carrier; There is Fund-71/ 76/ 92/2000/2003 to pay for on top of CLC. The importance of protecting marine environment has gone to the extent of imposing restrictions and limitations on exchange of ballast water and use of anti-fouling paint on ships. These instruments are the outcome of lead given in the UNCLOS-82.
There should be no need for putting people behind bar unless there is evidence of deliberate action or willful misconduct. Arresting people for cheap publicity or popularity should be discouraged. The recent surge in piracy at the horn of Africa has taken toll of many seafarers, recently a Pakistani Capt. Jaffery was killed being a hostage. The pirates are operating whilst the world navies combined joint task force - Horn of Africa (CJTF - HOA) are guarding Gulf of Aden, Horn of Africa, Arabian Sea up to Sallalah, but piracy remains deadly for seafarers, a real mind boggling issue to understand who is sponsor and beneficiary of piracy, but victims are seafarers only in this chess game, whilst settlement of release of hostage and ship are said to be made by London lawyers and ransom is collected.
On the occasion of the World Maritime Day, the Secretary General of IMO said in a message to the world's seafarers "Our intention is to pay tribute to you, the world's 1.5 million seafarers - men and women from all over the globe".
As a seafarer, I say the best tribute we can pay to the seafarers is to do something which will prevent them being bullied in future. I call upon both IMO and ILO to work together to prepare a draft document and then call a diplomatic conference to adopt a convention under title "Fair treatment to Seafarers". The document, with all due respect to the sovereignty of every state, should make it binding upon them to ensure that visiting seafarers are given shore-leave (without insisting on prior visa) and that states should provide such recreational facilities as are considered appropriate to their history and culture except where there is reason for not granting such shore leave.
In case of accidents or incidents resulting in loss or damage to human life, property or environment, the state, which has the jurisdiction, may inquire, investigate and deal with the matter in a manner acceptable under international treaties, practice and procedures. The flag state of the vessel should be involved in the process of investigation. Unilateral arrest of seafarers should be avoided unless there is clear evidence of deliberate misdeeds. Where arrests are already made, the seafarers should be treated with dignity and be provided with full access to legal support for grant of bail. Unless criminal negligence is established, monetary fine/ penalty should be preferred to jail sentence.
Wednesday, August 4, 2010
Maritime industry - corporate social responsibility
It is indeed commendable that our national flag carrier in a recent board meeting has taken the initiative of corporate social responsibility, rewarding PNSC afloat staff on yearly performance. The new management is dedicated not only to keep the organisation in green, but has embarked on replacing old tonnage.
The welcome news is induction of two double hull Aframax Tankers and plans to purchase a bulk carrier. The management is fully alive to its responsibility and, being public sector organisation, is making profit without any liability on taxpayers. The accelerated growth in tonnage is good one and even private sector is willing to join hands with PNSC, due to its performance, based on market reports.
Shipping is able to boast of its history and tradition that few other industries can match. And yet it remains as relevant to the modern world as it has ever been, perhaps, even more so because, without it, today's global economy simply could not function and half of the world will freeze.
The legacy that seafarers hand down to one another is one of the pride in a job well done, of attention to details, of innovative skills assiduously learned and in short pains-taking application of seamanship. It is widely predicted by maritime analysts, that unless something is done sooner, shipping is bound to face manpower crisis and there will be acute shortage of qualified officers to manage the ever-increasing world fleet.
There is a strong evidence that today educated young population does not find it an attractive career, thus industry cannot ignore the current shortage of good entrants. It is on record that in the recent past, shipping has done well to improve its safety/environmental records and complied with the stringent regulatory regime of IMO.
Recently, STCW 95 has been revised in a diplomatic conference held in Manila, thus it is imperative for the industry to complement the simultaneous developments with sense of corporate social responsibility to attract young educated officers.
Unfortunately in the past, there was no formally established and internationally accepted standard or principle for CSR and nobody was clear as to what the concept means and its application. It was addressed by the international standard organisation and now the ISO 26000 is the principle of CSR. The UK nicely summed up in a seminar, attended by me, that CSR is about how a business takes account of its economic, social and environmental aspects in the way it operates maximising the benefits and minimising the downslides.
The world business council for sustainable development defines corporate social responsibility in the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as local community and society at large.
It was heartening to note that the management of PSNC has comprehended the issue of staff morale, motivation of brand loyalty, reputation risk and environmental sustainability, widely recognised as drivers of competitive advantage. CSR has come to mean more than charity or philanthropy. It has moved from margins to mainstream of corporate strategy being inter linked objectives of doing business.
Needless to mention, in the 19th and 20th early century industrialist luminaries, W.H. Lever, George Cadbury, Rockefeller exposed visions of content, healthy and as a consequence, efficient workforce to place their countries on world map. Today environmental considerations, the fair treatment of workers and the duty of care businesses have toward their customers are of increasing concern. The status of employee as a " sensitive asset" has led the companies to perceive the value of creating work place attractive to applicants and corporate values that are aligned to wider social interest.
Ships today are indeed technologically advanced, workplace and, in future, it may be controlled by a single joy stick and a mouse ball in the arm of helmsmen sent out, and engineers will have probably clean hands and the calluses on their finger will be from tapping a keyboard rather than wielding a spanner. The crew accommodation will be clean and food will be good. I simply wonder if we are preparing for future by training the educated officers strictly on merits and changing the syllabus of our training academies and school.
Pakistanis need to work hard to remain employed on the ships of the future and there is a dire need to recruit quality officers and train them for future needs. Shipping is no different from other industries, and it was pleasing to participate in a seminar organised with the support of PNSC at Karachi where shipping was introduced to audience from different walks of life, ie businessman, bankers, insurance and investors, a first ever good effort to market the industry.
In Pakistan, shipping still suffers from relatively poor public image, probably through lack of understanding of its true importance and the fact that it only seems to grab the headlines when, an inevitably accident or pollution occurs as was the case of M.T. Tasman Spirit in 2004, which spilled 30,000 metric tonnes of crude oil.
The unique hazards confronting the seafarers are pirate attacks, unwarranted detention and abandonment, which serve as disincentive to recruitment, although seafaring is potentially exciting, financially rewarding career. Shipping carries more than 90% of the world trade safely, but it surely needs to attract and retain the sort of educated, qualified and motivated workforce of high calibre, to secure its own future, but without CSR application, it may not attract qualified educated youth.
The most welcome development for the seafarers is the adoption in 2006 of the International Labour Organisation (ILO) consolidated maritime convention dealing with seafarers working condition. I am proud to be a contributor at ILO and I hail this as the fourth pillar of regulatory regime for quality shipping, complimenting three IMO key conventions, SOLAS, MARPOL and STCW these treaties address the all-important social dimensions.
The IMO has launched go to sea campaign in 2008, which has been endorsed by all seafaring nations except Pakistan where it did not receive any attention, although we have young educated youth, who can readily fill the world seafarers shortage only after intense training.
I hope some realisation may dawn on the concerned ministry to use this window in time, getting our due share in world maritime jobs. The IMO has declared 2010 as year of the seafarers, thus appreciating the 1.5 million seafarers, who are serving the industry.
The concerned ministry may pick up the blueprint of PNSC-CSR and implement same through the government shipping office as incentive to seafarers working on foreign fleets remitting about 100 million dollars to the exchequer. The problem of the global seafaring shortage of 34000 persons can only be resolved through CSR initiatives by the ship owners, industry and concerned ministry.
The welcome news is induction of two double hull Aframax Tankers and plans to purchase a bulk carrier. The management is fully alive to its responsibility and, being public sector organisation, is making profit without any liability on taxpayers. The accelerated growth in tonnage is good one and even private sector is willing to join hands with PNSC, due to its performance, based on market reports.
Shipping is able to boast of its history and tradition that few other industries can match. And yet it remains as relevant to the modern world as it has ever been, perhaps, even more so because, without it, today's global economy simply could not function and half of the world will freeze.
The legacy that seafarers hand down to one another is one of the pride in a job well done, of attention to details, of innovative skills assiduously learned and in short pains-taking application of seamanship. It is widely predicted by maritime analysts, that unless something is done sooner, shipping is bound to face manpower crisis and there will be acute shortage of qualified officers to manage the ever-increasing world fleet.
There is a strong evidence that today educated young population does not find it an attractive career, thus industry cannot ignore the current shortage of good entrants. It is on record that in the recent past, shipping has done well to improve its safety/environmental records and complied with the stringent regulatory regime of IMO.
Recently, STCW 95 has been revised in a diplomatic conference held in Manila, thus it is imperative for the industry to complement the simultaneous developments with sense of corporate social responsibility to attract young educated officers.
Unfortunately in the past, there was no formally established and internationally accepted standard or principle for CSR and nobody was clear as to what the concept means and its application. It was addressed by the international standard organisation and now the ISO 26000 is the principle of CSR. The UK nicely summed up in a seminar, attended by me, that CSR is about how a business takes account of its economic, social and environmental aspects in the way it operates maximising the benefits and minimising the downslides.
The world business council for sustainable development defines corporate social responsibility in the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as local community and society at large.
It was heartening to note that the management of PSNC has comprehended the issue of staff morale, motivation of brand loyalty, reputation risk and environmental sustainability, widely recognised as drivers of competitive advantage. CSR has come to mean more than charity or philanthropy. It has moved from margins to mainstream of corporate strategy being inter linked objectives of doing business.
Needless to mention, in the 19th and 20th early century industrialist luminaries, W.H. Lever, George Cadbury, Rockefeller exposed visions of content, healthy and as a consequence, efficient workforce to place their countries on world map. Today environmental considerations, the fair treatment of workers and the duty of care businesses have toward their customers are of increasing concern. The status of employee as a " sensitive asset" has led the companies to perceive the value of creating work place attractive to applicants and corporate values that are aligned to wider social interest.
Ships today are indeed technologically advanced, workplace and, in future, it may be controlled by a single joy stick and a mouse ball in the arm of helmsmen sent out, and engineers will have probably clean hands and the calluses on their finger will be from tapping a keyboard rather than wielding a spanner. The crew accommodation will be clean and food will be good. I simply wonder if we are preparing for future by training the educated officers strictly on merits and changing the syllabus of our training academies and school.
Pakistanis need to work hard to remain employed on the ships of the future and there is a dire need to recruit quality officers and train them for future needs. Shipping is no different from other industries, and it was pleasing to participate in a seminar organised with the support of PNSC at Karachi where shipping was introduced to audience from different walks of life, ie businessman, bankers, insurance and investors, a first ever good effort to market the industry.
In Pakistan, shipping still suffers from relatively poor public image, probably through lack of understanding of its true importance and the fact that it only seems to grab the headlines when, an inevitably accident or pollution occurs as was the case of M.T. Tasman Spirit in 2004, which spilled 30,000 metric tonnes of crude oil.
The unique hazards confronting the seafarers are pirate attacks, unwarranted detention and abandonment, which serve as disincentive to recruitment, although seafaring is potentially exciting, financially rewarding career. Shipping carries more than 90% of the world trade safely, but it surely needs to attract and retain the sort of educated, qualified and motivated workforce of high calibre, to secure its own future, but without CSR application, it may not attract qualified educated youth.
The most welcome development for the seafarers is the adoption in 2006 of the International Labour Organisation (ILO) consolidated maritime convention dealing with seafarers working condition. I am proud to be a contributor at ILO and I hail this as the fourth pillar of regulatory regime for quality shipping, complimenting three IMO key conventions, SOLAS, MARPOL and STCW these treaties address the all-important social dimensions.
The IMO has launched go to sea campaign in 2008, which has been endorsed by all seafaring nations except Pakistan where it did not receive any attention, although we have young educated youth, who can readily fill the world seafarers shortage only after intense training.
I hope some realisation may dawn on the concerned ministry to use this window in time, getting our due share in world maritime jobs. The IMO has declared 2010 as year of the seafarers, thus appreciating the 1.5 million seafarers, who are serving the industry.
The concerned ministry may pick up the blueprint of PNSC-CSR and implement same through the government shipping office as incentive to seafarers working on foreign fleets remitting about 100 million dollars to the exchequer. The problem of the global seafaring shortage of 34000 persons can only be resolved through CSR initiatives by the ship owners, industry and concerned ministry.
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