Operators want Merchant Shipping Act expanded

Source: Bussiness Daily

Shippers are campaigning for the inclusion of the open registry system in the new Merchant Shipping Act to help the country attract more vessels operating in foreign countries.
Experts say that failure by the drafters to include the provision in the Act was an oversight that needs to be corrected if the country is to stand a chance in harnessing maximum benefits of global maritime industry.
Open registries are legal mechanisms used to attract merchant ships from countries with more stringent safety regulations and higher operating costs to countries offering more flexibility and lower registration fees.
Attract shipowners
The provision enables a country to attract shipowners to invest, while its citizens have an opportunity to buy ships that would fly its flag.
Failure by the Act, signed into law by President Kibaki last June, to explicitly stipulate provisions on open registry means that local investors interested in acquiring ships would have to search for a country with such provisions and register their vessels there.
The Act is yet to be operationalised as the Kenya Maritime Authority (KMA) is still working on related subsidiary legislation.
Only one vessel (cruise ship MV Royal Star which was recently sold to African Marine by African Safari Club) calls Mombasa a home port.
It is registered in the island of Antigua & Barbuda.
“It is unfortunate that the drafters of the Act left out this important provision. We expected the law to clearly talk of open registry and the benefits in it so that Kenya could attract vessels to fly our flag. The provision could have also attracted Kenyans who have registered their vessels elsewhere back home,” said Captain Fredrick Wahutu of Kenya Ships Agents Association.
The benefits for the open-registry countries include additional tax revenues and employment opportunities, especially for seafarers.
In other countries, the provision has contributed immensely to their respective economies.
In Panama, for instance, the fees charged contribute over five per cent of the national budget.
In Liberia, the ship registry constitutes one-sixth of the country’s total revenue.
These are the benefits the country was expected to fetch if the Act had provide incentives to either local or international investors interested to register their vessel in Kenya.
The incentives include a tax holiday for spare part imports for the repair of vessel registered in the country.
The shipping industry was optimistic that the new Merchant Shipping Act would have opened the country’s register to entice shipowners to register their vessels in the country and fly the country’s flag.
This could have also seen vessels registered in the country fly Kenyan flag hence fulfilling the country’s dream of acquiring vessels following the Kenya National Shipping Line’s failure to deliver one as required during its formation in 1984.
“There are Kenyans with vessels, but they have registered them in different countries. The Act offered an opportunity to magnetise them. But it seems that we would have to restart another process,” said Mr Wahutu.
He said that the oversight would lock out the country’s maritime sector from harnessing the full benefits that come with open registry.
Section 109 to 116 of the Act give a special provision for Bareboat chartering registration.
The provision means that vessels registered pursuant to a bareboat charter would fly Kenya’s flag, upon consent of the original registry, for a limited period of time.
The provision does not, however, offer incentives that would be given to Kenyans who would be interested to engage in bareboat chartering.
Bareboat chartering is also guided by international law, as reflected in the International Convention on Maritime Liens and Mortgages, 1993, and provisions of the UN Convention on the Law of the Sea.
Existing mortgages
This means that the laws of both the State of bareboat charter registry and the State of underlying registry should contain provisions for maintaining the status of existing mortgages during the period the vessel is subject to bareboat registration
Currently, the country’s shipping industry relies on either time chartering (hiring a vessel for a specific amount of time) or voyage chartering (hiring a vessel for a single voyage).
Though Kenya Maritime Authority (KMA) director-general Nancy Karigithu could not say why the act had ignored that important provision, she said that no stakeholder had formally complained.
“We are surprised that no stakeholder has raised the issue with us now or even during the stakeholder consultations,” said Mrs Karigithu.
She told Business Daily that KMA would give a detailed response on the issue later.
“Open registry is very important. Other than seafarers, other Kenyans would have secured jobs in liners that would have set their offices here. We cannot chest-thump that Kenya is the region’s shipping hub without open registry,” said Seafarers Assistant programme officer Andrew Mwangura.

África aumenta su papel en el comercio marítimo internacional

Fuente: Afrol

Más del 80% del comercio internacional de mercancías se realiza por vía marítima mar y el sector naval se enfrenta a un periodo de desafíos ante la crisis económica global. Distintos países africanos registraron un fuerte crecimiento en 2008.

La afirmación consta en el informe "Revisión del Transporte Marítimo 2009", divulgado por la Conferencia de Naciones Unidas sobre Comercio y Desarrollo (UNCTAD). El informe revela que se registró una desaceleración en el crecimiento del sector debido a la inestabilidad económica en el mundo.

El documento revela desaceleración del crecimiento del comercio marítimo en 2008, provocada por la reducción del crédito con la llegada de la crisis y por la disminución en la búsqueda de productos y servicios de transporte.

Según el informe, hubo un aumento del 3,6%, con un número récord de más de 8.000 millones de toneladas transportadas el año pasado. El resultado es inferior al registrado en 2007.

Una recuperación parcial ya se registró a partir del segundo semestre de 2009, afirma el organismo, pero todavía existe volatilidad en las tasas de flete, lo que sugiere incertidumbres para economías en desarrollo dependientes del comercio de materias primas.

A pesar de la inestabilidad, el abastecimiento de nuevas embarcaciones continuó en alta porque los pedidos habían sido hechos antes del colapso financiero internacional. Sólo este año, la flota de barcos cargueros creció un 6,7%.

El informe también analizó el desarrollo del transporte en África desde 2006, cuando la UNCTAD analizó la región por última vez.

Distintos países africanos registraron un fuerte crecimiento en 2008, cerca del 5%, liderados por naciones como Angola, Liberia, República de Congo y Etiopía. La participación de África en el comercio marítimo mundial es del 2,7%.


Por staff writer

the country's maritime industry headed for major streamlining

Source: Coastweek

Coastweek -- Transport Minister Chirau Ali Mwakwere has called on stakeholders in the maritime industry to support the recently enacted Merchant Shipping Act 2009, to boost trade in the region.

The minister said the operationalisation of the Act will spur economic growth given that 95 per cent of international trade is maritime based.

Speaking during the official opening of a regional stake holders meeting on the establishment of consultation machinery on maritime transport services in Mombasa , the minister moved to allay fears among a section of shipping lines that the new Act would lock out foreigners.

"It is regrettable that some of the stakeholders misinterpreted this new Act as one that has been enacted to restrict foreign direct investment in the maritime transport sector.

"This is not so.

"On the contrary, the Government through my Ministry encourages collaboration between local and foreign firms.

"The Act does not prohibit direct foreign investment in any segment of the logistics chain.

"It addresses the issue of vertical integration of the logistics chain where a few dominate the sector by applying pricing practices that limit the entry of new participants," he added.

The minister said the government had mandated the Kenya Maritime Authority (KMA) to monitor efficiencies and competitiveness of a whole transport logistics supply chain are required in Kenya 's maritime industry.

The regional stakeholders will among other things deliberate on ways of improving the transport infrastructure situation to boost trade.

In her address to the stakeholders, KMA Director General Nancy Karigithu said the country's maritime industry is headed for major streamlining with the implementation of the Merchant Shipping Act, 2009.

The new law will, among other things reduce the cost of maritime transport and ease business in Kenya's shipping industry and the region in general, making the country's exports more competitive in foreign markets and imports more affordable to the common people.

She said the new law is poised to create massive job opportunities by opening a whole new field of opportunities through the separation of various auxiliary duties at the port.

"The main purpose of the Act is to create a comprehensive and modern legal regime for merchant shipping in Kenya .

"It will open the potential in the industry, drastically bringing down the cost of doing business and creating a lot of jobs for Kenyans," said Karigithu.

With over 95 per cent of Kenya 's international trade conducted through the maritime and shipping industry, the government is keen on streamlining the sector to ensure not only that it meets international industry standards, but also that it helps deliver Vision 2030 to Kenyans.

By opening up maritime education Kenyans at both skilled and semi-skilled levels will now have a chance to get jobs in the international shipping, and thus the ability to plough back foreign exchange reserves into the economy in form of salaries.

The new legislation is also expected to address maritime safety, security and marine pollution prevention as well as the preservation of the marine environment.

"It is of cognizable significance that provisions have been made in the Act to address competitiveness and efficiency of service delivery in the maritime sector, an area that has been a major problem to both local traders and consumers as well as the economies of the region that rely on the port of Mombasa," she said.

The law will see the separation of auxiliary shipping services such as ship ownership and clearing and forwarding, ship registration among others in order to encourage competition and create more employment opportunities among Kenyans.

Karigithu said with the enactment of the Shipping Merchant Act ( MSA ) KMA is currently working on modalities to modernise operations within the industry to create a level playing field among stakeholders and empower more local players in the industry.

She assured industry stake holders that the Act will create more business opportunities for local and foreign players with an estimated creation of 50,000 new local jobs in the lucrative auxiliary maritime services sector.

"There is fear among a section of stakeholders that the Act is discriminatory to foreign investors in the shipping industry.

"This is due to misinformation.

"The truth is that the Act will create a level playing ground for all players, whether foreign or local," she said.


Karigithu said the new law will bring down the cost of maritime transport and subsequently reduce the cost of goods by addressing market distortion through discouraging monopolies and opening up the logistics chain to different players, thus making services more competitive.

Maritime Labour Convention to Be Implemented in 2011

Source: AllAfrica

The Director of the International Labour Standards Department at the International Labour Organisation (ILO), Madam Cleopatra Doumbia-Henry, has disclosed that the much-anticipated Maritime Labour Convention 2006 (MLC, 2006) would be implemented in 2011, after the ratification of the 30 states, with over 33% of the world's gross tonnage.

Madam Doumbia-Henry made this known at the opening of four day sub-region seminar on the MLC 2006, for English-speaking members of the Economic Community of West African States (ECOWAS) in Accra.

It was disclosed that after the seminar, all five countries, namely Ghana, Gambia, Nigeria, Sierra Leone and Liberia, would ratify the convention.

The MLC 2006, commonly known as "Super Convention" for the world maritime sector, provides a comprehensive charter for both seafarers and ship owners.

The convention, when implemented, would provide an innovative and integrated approach to ensure decent work for all seafarers, irrespective of their geographical locations and nationalities.

It is specifically designed to help achieve the twin goals of ensuring a "level playing-field" for quality ship owners, and at the same time, provide concrete measures that will help to secure "Decent Work" for the world's more than 1.2 million seafarers.

Madam Doumbia-Henry observed that the convention was the result of a ship owner and seafarer initiative, developed through more than five years of intensive international tripartite consultations, involving more than 100 countries.

According to her, it was intended to be the "Fourth Pillar" in the international shipping regulation, complementing and supporting the major maritime conventions of the International Maritime Organisation (IMO) on environment protection and ship safety and security.

The "Super Convention" brings together 37 conventions on almost every aspect of seafarers' decent working and living conditions, including minimum age, medical certificates, employment, repatriation, social security protection, employer liability for healthcare and costs of illness, occupation health and safety, food, wages and leave.

The Minister of Employment and Social Welfare, Mr. Stephen Amoanor Kwao, in his welcome remarks, pointed out that the seminar should serve as a platform for cross-fertilisation of ideals and experiences, to enable the sub-region find solutions for the ratification and implementation of the convention.

He entreated the participants to address the legislative gaps existing in their respective countries, and recommend to their governments on the ratification and implementation of the convention.

New maritime law favours local, regional investors

Source: The East African

By Githua Kihara and Gitonga Marete (email the author)

The Merchant Shipping Act 2009 which was assented to by Kenya’s President Mwai Kibaki last month is expected to open the maritime industry to local and regional investors.

It marks a significant turning point in the numerous past attempts to streamline regulation of Kenya’s maritime transport sector.

The Act is intended to create a comprehensive and modern legal regime for merchant shipping in Kenya by replacing the outdated Merchant Shipping Act, 1967.

Kenya has been operating under the 1967 law which does not reflect major transformations in the industry globally, and which had locked out potential investors.

The Kenya Maritine Authority Director General Nancy Karigithu told The EastAfrican that the new law opened opportunities for investment in water transport, as the legislation recognises procedures for creating mortgages on vessels.

This means that entrepreneurs can now access funds from banks and other financial institutions to buy floating assets as processes for ensuring that the loans and the assets are secured are guaranteed.

The Act is a welcome initiative lauded by many industry players, as it provides for appropriate legislation to address maritime safety, security and training.

It also covers marine pollution prevention and the preservation of the marine environment; auxiliary shipping services; piracy and armed robbery that have become serious threats against ships in waters off the Coast of Somalia.

“It is of significance that provisions have been made in the Act to address competitiveness and efficiency of service delivery in the maritime sector, an area that has been a major problem to both local traders and consumers as well as the economies of the region that rely on the port of Mombasa,” said Ms Karigithu.

“Lack of modern laws has long caused problems for banks and business people who could not access such financing due to the lacuna in law and also lack of regulation in the industry for safety standards,” said Ms Karigithu.

A watercraft census and baseline survey carried out by the Kenya Maritine Authority last year revealed that there were 19,050 vessels operating in both coastal and inland waters of Kenya most of which are not registered and are therefore not controlled, leaving them to be misused by unscrupulous individuals.

Inefficiencies of trade facilitators may now be identified under the new law and in such a climate, pricing of transport should be rationalised to the benefit of the economies of the region.

Kenya awaits merchant law

Source: Capital FM

NAIROBI, Kenya, Apr 4 – A Merchant Shipping Bill that is awaiting Presidential assent will allow Kenyans to own ships for the first time ever.

Transport Minister Chirau Mwakwere says the new law will revolutionise the maritime industry in the country which has lagged behind due to the lack of a proper legislative framework.

“For the first time we have a maritime law that will empower Kenya to become a true maritime nation,” Mr Mwakwere said. “We are the only country that has an ocean front 300 miles and we are doing nothing.”

Mr Mwakwere noted that for a long time Kenyans could not own ships because of the lack of a law recognised by the International Maritime Organisation.

"The passage of the Bill will allow training of seafarers that will create more lucrative jobs for people in the shipping industry," Mr Mwakwere said.

He said among the beneficial clauses is one that would make it compulsory for 51 percent ownership of shipping companies to be local.

“We have international organisations which own ships, the shipping companies, tracking companies and even the containers in Mombasa. All the money that is paid to them is paid overseas not in Kenya,” said the Minister.

The Transport Minister said the Bill would further allow the country to train personnel in the industry who would receive international recognition and thus be able to work anywhere in the world.

The Bill was passed by Parliament in February this year.