Importance of maritime sector in national economyby FR Chowdhury
THE sea plays a very important part in our life. Except for some limited trade with India and Myanmar, the bulk of our international trade is seaborne. The two seaports that we have are our great assets. We must develop them and utilise them to the maximum extent. Not only that, we have to plan and develop a deep-sea port. This is because the larger ocean-going ships cannot enter our ports. We have to keep them at anchorage or even away and then ferry the cargo in smaller vessels. This increases the cost of imported materials. In case of chartered vessels, we have to pay demurrage in terms of thousands of dollars.
There has been lot of talks about transit and transhipment. Why do we not look at it in a comprehensive and positive manner? We must also insist on development of road and railway links with Nepal, Bhutan and adjoining parts of India and China so that all those cargoes can move through our ports and bring in more business for our ports and related enterprises. The development of a deep-sea port will become meaningful if we can use them to our maximum commercial benefit. We must not hesitate; rather, we should be the driving force behind this idea. Development of port facilities, together with connectivity to places beyond our national border, must be considered for our future projects.
Recently, we resolved our economic boundary at sea with Myanmar. We are expected to reach a similar resolution with India. Then it will be our duty to plan and decide a national strategy on planned exploitation and utilisation of our resources. However, to protect our interest and establish our jurisdiction and control, it is necessary for us to have a national coastguard and navy. The coastguard should, in line with normal international practice, provide search and rescue near our coast and combat and contain any accidental pollution apart from fighting piracy and protecting our fishing fleet. The navy will have a more dominant role in showing our flag within the exclusive economic zone and protecting our economic interest by regular patrols. The importance of strong and effective navy and coastguard cannot be overemphasised. However, we have limited resources. What we cannot achieve with our limited resources, we should be able to achieve by vigorous training of our workers and proper exercise.
Fishing is also a very important matter. It is not only a case for catching more fish. It is also a case for protection and preservation of fish in order to maintain a sustainable growth. The fisheries ministry must assess the fish stock on the basis of scientific data and determine the total allowable catch. The shipping ministry should only register fishing vessels licensed by the fisheries ministry and administer safety and environmental protection including survey-certification of the fishing vessels and examination and certification of the skippers, second hands and engineers.
Let us now discuss oil, gas, mineral and other resources of the sea. This is what we call offshore activities. They include survey vessels, research vessels, rigs and platforms — floating, semi-submersible, jack-up rigs, accommodation vessels, standby and rescue vessels, anchor handling tugs, supply vessels, FPSO (floating, production, storage and off-loading), etc. Because they operate at sea, they fall under the jurisdiction of the maritime administration to ensure safety and environmental protection. Our maritime laws/merchant shipping act should thus be updated accordingly. Such laws could reserve the domestic trade (cabotage) to our own ships. This would mean that transportation of goods or passengers from one point in Bangladesh to another by sea route or waterways can only be done by Bangladeshi flag vessel. Similar provision could also be extended to offshore activities by stating that all offshore activities including engagement of rigs, platforms and other units within the economic zone of Bangladesh can only be done by units registered in Bangladesh. This could be further extended by a provision to state that any employment on ships and units engaged/operated within the exclusive economic zone shall be treated as employment in Bangladesh and foreign nationals shall require work permit. However, there must be a clear provision for exemption/waiver so that development activities are not hampered.
In the meantime, we must gear up offshore training and certification for which there is already a huge demand abroad. It must be clearly understood that offshore activities form a part of the maritime domain though control of exploration and exploitation is a matter for the ministry of energy. It is the energy ministry that will divide the exclusive economic zone into various blocks and lease out on best beneficial terms but their safe operation and protection of the marine environment will remain with maritime administration. Our entrepreneurs should explore possibilities of investment in offshore vessels and units and our state owned exploration unit must be a partner (as a mandatory part of contractual agreement) with the foreign contractors. This is the way forward.
Shipbuilding is a shore-based industry and in general is under the industries ministry but it is closely linked with the maritime sector. Ships built in Bangladesh and registered in Bangladesh must be given all possible incentives. This will encourage local ship-owners to place orders for new building in Bangladesh. Bangladesh should impose a ban in import of ships under 5,000 GT so that our yards get some degree of protection. This would mean that no ship under 5,000 GT can be registered as a Bangladeshi ship unless it is built in Bangladesh. The double digit interest rate is not helpful for our industrial growth. There must be a special fund to provide loans to the ship building industry at a lower rate.
The industries and environment ministries should oversee the ship-breaking industry bearing in mind that the industry is a big employer and source of basic material (scrap) for our re-rolling industries. However, we must abide by international requirements for proper health, safety, and protection of the environment.
Finally, we need to discuss the real maritime sector, i.e. shipping. Historically, our seafarers have been serving as ratings when ships used to be owned and managed by European colonial powers. We first saw the European officers and then a few Pakistani officers. Until 1962, when the marine academy was set up, the common people in this country knew nothing about a career (as an officer) in the merchant marine. Today, due to the dedication and high professionalism by our officers, hundreds of people are employed around the world in this field. Not only in ships but also ashore in very responsible positions all over the world — USA, Canada, UK, Australia, Hong Kong, Singapore, UAE, Saudi Arabia, PNG and Cyprus. When there is so much gloom and doom, we can be proud of our marine academy and the marine community. We could perhaps do even more by introducing the new alternative training combining deck and engineering together. As stated earlier, we must introduce offshore training for those mariners who want to make a career in the oil and gas sector. We should also concentrate on specific training for gas tankers, ECDIS, DP etc. We have to update our rules-regulations and system-procedures to meet the newer requirements.
I understand that the government has decided to set up at least six more marine academies in the country. Apparently, this is good news. The question is whether the government has done a proper feasibility study or is it engaging in this project because it would mean more money. It must be understood that cadets trained in such academies do not have any market value until they qualify as an officer. And in order to qualify as an officer, one needs to complete a mandatory period of sea-service. The question is — who is going to employ these cadets and give them an opportunity to complete the sea-service. We do not have a large merchant fleet under the Bangladesh flag to ensure their training berth. We will have to count on the good gesture of foreign shipping companies. Will the government engage in vigorous marketing to find training berths for academy trained cadets or just leave it up to them to find their own employment? If we cannot provide the necessary training berth, then we will simply ruin the future of the bright young people who could have otherwise pursued another trade or profession. While the idea behind more academies is laudable, we must move cautiously to achieve the objectives.
The recently established private marine academies are doing a good job. They receive the order for cadets from foreign companies and train accordingly. They fulfil their promises. However, since they are private academies, the cost is high and the common people cannot afford it.
Unless we do not have a big fleet under our flag, we, as a nation, cannot be influential enough at any international forum. We should thus think over if we should go for an open register or partly open register where certain interests will be retained for purely Bangladeshi investors. We need to have an all-party debate on future national policies and re-write a proper merchant shipping act. We have to become party to all international maritime conventions that are already in force internationally. For this, the ministry of shipping and ministry of foreign affairs have to work together.
There are a number of obstacles and impediments that must be removed to encourage ship-ownership and operations. But the question is, why do ships have to be brought to Bangladesh within a period of six months for full registration? Why cannot the registration be completed as soon as the ownership and flag are changed? If one happens to buy a refrigerated vessel in Brazil, and employs it for carrying orange juice between Brazil and Europe, then why is it necessary to bring it to Bangladesh only for the purpose of registration? If we want the Bangladeshi flag to grow and flourish, then we must remove all taxation including the so-called 5 per cent tax in advance. The torture of customs valuation or evaluation should be put to an end for which a battalion of custom officers board the vessel as soon as it reaches Bangladesh. It must be understood that full registration on delivery is sometimes necessary to register the mortgage (normally a condition from the financier to protect its interest). The government should set up a special committee consisting of ship-owners, department of shipping, central bank, revenue board and other interested parties to resolve these matters.
Maritime education and training are not confined within the sea-going training and skill alone. There are lot of maritime related education that can be acquired without going into the sea. We have a serious shortage of well qualified maritime lawyers. So long we do not have sound legislation in respect to merchant shipping trade and commercial matters and well qualified maritime lawyers, we can never become a centre of maritime dispute resolution — litigation or arbitration. Legislation provides the basic foundation upon which every other branch grows. Bangladesh must, therefore, develop a comprehensive merchant shipping legislation providing clear provisions for all international conventions in force: mortgage, lien, claim and arrest of ships, offshore matters, fishing and pleasure craft. Our universities should start an LLM course of one year duration in maritime law. This could be yet another field of man-power training.
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