Consternation as MoEF announces moratorium on new port development.

New Delhi, Oct 5 The Indian Ministry of Environment and Forests (MoEF) August 21 order putting new port developments in the country on hold till a policy is in place
has sent shockwaves across the industry. Many investors are reportedly deeply concerned about the state of their projects. There is additional confusion since State Governments as well as the Ministry of Shipping (MoS) have been pushing for capacity addition almost simultaneously; in fact, the Shipping Ministry has been aggressively pursuing port development as part of its promised ‘hundred day agenda’ declared soon after this government came to power.


The MoEF has categorically decided that no new proposals would be entertained till they finalise their policy. The policy is to address projects on the coastline and other activities connected with commercial ports, including any expansion plans. Media reports suggest that the MoEF has decided to impose a three month suspension during which it will not decide on proposals already received, either for new ports or for expansion of existing ones. “The environment ministry has placed a moratorium on clearances to new and old port development projects on the recommendation of a committee headed by MS Swaminathan. We will take up the issue with the Cabinet and other authorities,” shipping secretary APVN Sarma told an Assocham meeting. Rumours suggest that Sarma would be taking up the matter with the MoEF soon.


Sources say that the Ministry’s decision is influenced by the earlier recommendations of the Swaminathan report that addressed the issue of public objections to the Coastal Management Zone Notification. That document had asked for a moratorium on new port capacity till the ‘cumulative impacts of the individual projects on the coast line’ were studied completely. Environment ministry officials say that the coastline is being damaged by a slew of approvals for port expansion and development.


Industry critics allege that the MoEF decision is unilateral and against Shipping Minister GK Vasan’s plans to expand almost 20 ports across the country. Included in these are investments lined up totaling to more than Rs 3300 crore. They add that the MoEF is being intransigent in issuing an order without even consulting their counterparts in the MoS. Others point out that the Coastal Regulation Zone notification of 1991 has given port development a special status, and that, as one industry watcher says, "While amendments can always be added to further improve the New Delhi, Oct 5 The Indian Ministry of Environment and Forests (MoEF) August 21 order putting new port developments in the country on hold till a policy is in place
has sent shockwaves across the industry. Many investors are reportedly deeply concerned about the state of their projects. There is additional confusion since State Governments as well as the Ministry of Shipping (MoS) have been pushing for capacity addition almost simultaneously; in fact, the Shipping Ministry has been aggressively pursuing port development as part of its promised ‘hundred day agenda’ declared soon after this government came to power.


The MoEF has categorically decided that no new proposals would be entertained till they finalise their policy. The policy is to address projects on the coastline and other activities connected with commercial ports, including any expansion plans. Media reports suggest that the MoEF has decided to impose a three month suspension during which it will not decide on proposals already received, either for new ports or for expansion of existing ones. “The environment ministry has placed a moratorium on clearances to new and old port development projects on the recommendation of a committee headed by MS Swaminathan. We will take up the issue with the Cabinet and other authorities,” shipping secretary APVN Sarma told an Assocham meeting. Rumours suggest that Sarma would be taking up the matter with the MoEF soon.


Sources say that the Ministry’s decision is influenced by the earlier recommendations of the Swaminathan report that addressed the issue of public objections to the Coastal Management Zone Notification. That document had asked for a moratorium on new port capacity till the ‘cumulative impacts of the individual projects on the coast line’ were studied completely. Environment ministry officials say that the coastline is being damaged by a slew of approvals for port expansion and development.


Industry critics allege that the MoEF decision is unilateral and against Shipping Minister GK Vasan’s plans to expand almost 20 ports across the country. Included in these are investments lined up totaling to more than Rs 3300 crore. They add that the MoEF is being intransigent in issuing an order without even consulting their counterparts in the MoS. Others point out that the Coastal Regulation Zone notification of 1991 has given port development a special status, and that, as one industry watcher says, "While amendments can always be added to further improve the stipulations, a blanket moratorium is not the answer to the malady."
Another senior port industry official commented, "While it is hoped that MOEF has done their homework before arriving at this decision, banning new projects will not only have a very harsh impact on the growth of coastal projects but also will surely have cascading effect on other sectors of economy, thereby affecting the all round development of the country as a whole."


Meanwhile, the environment ministry has conducted a satellite image survey of the country and is studying the report. “We won’t give clearance to a proposal falling in the ‘hot’ spots,” confirmed a MoEF official to a business newspaper.

stipulations, a blanket moratorium is not the answer to the malady."
Another senior port industry official commented, "While it is hoped that MOEF has done their homework before arriving at this decision, banning new projects will not only have a very harsh impact on the growth of coastal projects but also will surely have cascading effect on other sectors of economy, thereby affecting the all round development of the country as a whole."


Meanwhile, the environment ministry has conducted a satellite image survey of the country and is studying the report. “We won’t give clearance to a proposal falling in the ‘hot’ spots,” confirmed a MoEF official to a business newspaper.
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The Full City incident: Criminalisation in Norway?

Photo: The Norwegian coastal administration




Mumbai October 4 The two officers charged with negligence in the ‘Full City’ incident are ‘lost, confused and losing spirit’, according to their lawyer. The Captain and Third Officer of the ship, now under arrest in Norway, will hear next week whether they can return home pending investigations. The two seafarers, a Captain who was due to retire for health reasons this year and a first trip Third Mate both face charges of gross negligence in relation to the disaster.


The treatment of the pair has received international condemnation, with Intermanager’s Roberto Giorgi saying that if the case goes to the Supreme Court for trial he would contact Intercargo and the International Transport Workers Federation to discuss a joint industry response to the Norwegian authorities. Mr. Girogi added that it was vital to continue the push for uniform regulation around the world that would protect seafarers’ from unreasonable prosecution, adding that the case seemed to involve “local authorities who know nothing about shipping, and have no clue about the role and responsibilities of seafarers”.
Lawyers for the two officers, as well as those representing Cosco and the London Steamship P&I Club, say that initial charges against the two were relatively minor and pertained to violations of the Norwegian Safety Act. Others have been critical of the fact that the two had their passports impounded even before they were charged.


The 15 878 tonne bulk carrier ”Full City” grounded in a storm on July 31st near the town of Langesund in Telemark, Norway. Panama flagged and Cosco owned, she had around a thousand tonnes of bunkers on board and was in ballast. Norwegian rescue teams airlifted 18 crew to safety, five staying behind on board the ship. An unknown quantity of oil leaked out to the sea, polluting the area from Stavern to Grimstad. The spill spread over a 150 kilometre stretch of coastline in southern Norway and severely hit a bird sanctuary and a popular summer resort near Oslo. The news made national headlines a little before the Norwegian elections.


The Captain was initially charged with “not reporting that his ship was in a dangerous situation," police attorney Siri Karlsen had told a news conference in August; the charge carried a maximum two year jail term. The subsequent and infrequently used charge of ‘gross negligence’ came as a shock to the two officers.


The Norwegian Shipowners Association, meanwhile, has issued a statement that says that it is against the trend of criminalising seafarers. NSA lawyer Viggo Bondi says that the police need to ensure they have the full competence to deal with such a case. “If you don’t have the necessary competence it is easy to jump to conclusions too fast, then you criminalise seafarers,” he said. The NSA remained confident that the two Chinese would get a fair trial, though. “We have good regulations for the rights of people under investigation, and seafarers are not treated any differently,” Bondi said.


However, many in the industry agree that uniform regulation is urgently required to protect seafarers’ rights. Unfortunately, as Intermanager’s Giorgi says, “I can’t say we have seen a very strong message from the International Maritime Organisation in trying to deal with this issue.”
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Industry Snapshots

M.V. Black Rose off Paradip


Shipping Ministry Committee’s opinion: ships more than 25 years old should be banned from Indian ports. The high powered and Chairman of National Shipping Board led committee feels that exceptions could be made if the vessel in question was “approved by the competent authority”. Concerns were expressed that an estimated 35 per cent of the ships calling at Indian ports are more than 25 years old. Investigations into recent accidents on the Indian coast have thrown up the fact that these ships are particularly vulnerable; besides, there have been major shortcomings in documentation that have exposed fraudulent certificates and insurance documents in at least one case off Paradip recently. It has reportedly been recommended that stringing preloading and post loading inspections be conducted in case of ships carrying bulk, especially iron ore, and that ports ensure compliance with existing safety codes. Members of the committee include the Chairman of Visakhapatnam Port Trust, the Chairman of New Mangalore Port Trust and the Deputy Chairman of Paradip Port Trust. These are preliminary findings: a final report is awaited.


Industry wants government to review FDI rules in shipping, reports Livemint. Although the 100% FDI allowed in shipping since 2001 has proved a damp squib with no takers, shipowners are concerned about overseas competition and are demanding a level playing field. Reports say that representatives will meet commerce minister Anand Sharma to push for a review. “Hundred per cent FDI in shipping has not helped India at all,” says Mercator Shipping’s Anil Devli. “Nobody came to India all these years.” Observers say that the move has been prompted by the impending ban on single hulled tankers next year; with India allowing single hulls for another five years till 2015, the industry is concerned that foreign shipowners will see India as a preferred destination for their older ships. Malaysian AET Tanker Holdings is already looking at registering some ships in India. Critics allege that this is unfair. “If you want to start a company in Malaysia, you should hand over 51% stake to a local company there,” one says. “This should be reciprocal.” Indonesia, too, has reserved all domestic LPG shipments for their own flag; China protects domestic shipping to a much greater extent. “In today’s context, when the world is looking inward, and every government talks about protectionist measures for their indigenous industry, we must do the same in India,” S. Hajara, CMD of SCI told Livemint. “We are saying that the Indian coast should be completely reserved for the Indian flag carriers.”



Moore Stephens Shipping Confidence Survey optimistic. The shipping consultancy firm says that confidence levels in the shipping industry have improved in the last quarter, with global analysts expressing average confidence levels at 5.7 on a scale of 1 to 10; this figure was at 5.5 in May 2009. Although brokers were the most optimistic, owners, managers and charterers were not too far behind. Surprisingly, given that Chinese demand has driven much of this confidence, optimism was lower in Asia, with confidence levels remaining unchanged at 5.9. The industry has mixed opinions on asset acquisition, with some respondents saying that ships could presently be bought at historically low prices while others expecting prices to drop further. Most opined that the worst may be over globally. “The recovery of the global economy will result in strong demand for tonnage as delayed projects get up and running again,” says one. Amongst the less optimistic predictions were concerns about the massive oversupply situation. One analyst said, “Because two newbuildings are being delivered for every vessel scrapped, the shipping market will not be able to pick up over the next three or four years, and it may deteriorate even further, with a number of owners forced into bankruptcy.” Other concerns included high finance costs and fears that ‘confidence would return to the industry more slowly than it disappeared’.


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DG Advisory: Indian ships and crews strongly advised to use Naval escort services off Somalia.

Mumbai, Sept. 30 The Directorate General of Shipping of the Indian Ministry of Shipping has issued an advisory to ships transiting the Gulf of Aden and the pirate infected waters off Somalia. The Director General of Shipping advisory “strongly advises all Indian flag ships and ships carrying Indian seafarers to utilise the escort services being provided by the Indian naval ships in the Gulf of Aden to the maximum extent. In the event such merchant vessels are unable to conform to the Indian warships schedule for any reason, they are advised to take the escort schedules of warships of other countries that carry out escort throughout the length of the IRTC.”


The present circular (Merchant Shipping Notice No 33 of 2009) is available on the DGS website and refers to an earlier stronger advisory issued last week, that had asked “all Indian ships and ships with Indian crewmembers not to transit the piracy affected areas in the Gulf of Aden and Somali waters without Indian Naval Escort.” However, “having received representations from INSA, FOSMA and MASSA” in connection with that earlier advisory, the DGS has reviewed the matter before issuing the latest circular.



In the last week or so there have been massive concerns in shipping circles following media reports that NATO has warned the Indian government of the probability that Indian ships and seafarers may be targeted by Al Qaeda linked organisations off Somalia. What is even more alarming is that these threats appear to be particular; NATO has reportedly said that there is specific intelligence available with them to suggest that pro Al Qaida elements are plotting to target Indian ships and sailors in the next few weeks. “Certainly Al Qaeda links and has probably connections with the Al Shabaab which is vying for power in the South around Mogadishu," a senior official says.


What is not so widely publicised is that Earlier, a NATO warship rescued fourteen Indian sailors recently after they were freed by pirates who, they say, had beaten them during 10 days of captivity. Analysts say that numerous such hijacks remain unreported even today. Interestingly traders in Dubai's dhow wharf told Khaleej Times how pirates were increasingly being seen up to the Strait of Hormuz, near the UAE. Officially, just one such record exists. However, as piracy expert Roger Middleton says, "A dhow captain who speaks little English may not know how to report a pirate attack to the IMO or NATO," he said. "There may be many more cases occurring which we simply don't know about."


For many months, we at Marex have often highlighted the fact that organisations like Al Shabaab within Somalia are linked to Al Qaeda; a recent report in this publication also detailed Pakistani involvement, including the fact that trained Pakistani nationals had been caught by a Russian warship with arms aboard a hijacked ship sometime ago. With elements within Pakistan and Yemen involved, and with persistent reports of shadowy players from Europe and the UAE coordinating pirate activities, we are relieved that these warnings are being taken seriously.


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In the recession, an Angel of Mercy

Fujairah, UAE, Sept. 20 The M/V Flying Angel is providing mariners, including stranded seafarers, at this second largest bunker anchorage in the world with great succour and support. Fujairah has 100 to 150 ships anchored off shore at any given time; every year, over 10,000 ships and over 200,000 seafarers drop anchor here.


Back in 2007, Rev. Miller of the charity ‘Angel Appeal’ realised that these seafarers were isolated, lonely, depressed and with no contact with family and friends when they visited Fujairah. Anchorage was too far and it was too expensive for a boat to send crew ashore. Other leisure and communication facilities were nonexistent at anchorage. His brainchild: a seafarer’s support boat.


The M/V Flying Angel was launched February 28, 2007 by HRH Prince Charles. The first Seafarers Support Boat of its kind in the world, it was the winner of Seatrade’s ‘Investment in People’ Global Award 2008. The boat services on average of 75 seafarers a day. Operating daily, she is equipped with email and telephone facilities, a small shop selling essential items, a Welfare Officer and book and DVD libraries. Not surprisingly, the email and telephone facilities are the most popular.


That is not all. Today, the situation is worse in the recession, which has resulted in many seafarers, most of them Filipinos, being stranded in the UAE. Miller finds that many crew visited by the “Flying Angel" have not been paid for months; he says that he has even visited a crew that has not been paid for four years! The charity provides food and essential items to these seafarers daily. “In such cases we sometimes have to get their passports back from their employers and buy them a plane ticket home," Miller says, disclosing that more than ten percent of ships in the region were in a similar position. “When they are cutting budgets, oftentimes the first thing to go is usually the salary of the crew," he rues.

Some of the Filipino beneficiaries are crewmembers of the “Heredia Sea," whose Filipino chief engineer committed suicide last year. A report in the Khaleej Times says that “Angel Appeal," has helped many seamen whose vessels are stranded off Fujairah.
“It is an unnatural situation, where they are trapped onboard a ship with nothing to do and miles from their families. In many cases, people become lonely and depressed. It can be torture for them," says the report. Rev Miller empathises with the traumatised mariners: “Emotional exchanges on webcam or on the phone are commonplace on board the Angel, as sailors exchange precious words of consolation with their wives and children," he says.


“When you become a seaman, you sacrifice your freedom for your family," says Captain Rene Maloto in the Khaleej Times, adding that the “Flying Angel" plays a vital role in boosting crew morale on his ship.

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