Merchant Shipping Bill 2024

Context: India unveils new Merchant Shipping Bill 2024 which seeks to repeal Merchant Shipping Act, 1958 to streamline vessel ownership, registration, and environmental regulations.

Background: 

• The Merchant Shipping Act, 1958, restricts seafarers’ welfare provisions to Indian-flagged ships, despite 85% of the 2,80,000 active Indian seafarers working on foreign-flagged vessels. Additionally, the Act lacks enabling provisions for implementing certain international conventions that India has signed or plans to ratify.
• The Merchant Shipping Bill introduces significant changes to modernise India’s maritime framework, drawing upon the best practices of leading maritime jurisdictions like the U.K., Norway, and Singapore.

Key Provisions of Merchant Shipping Bill 2024:

• Simplified ownership criteria: 
  • The existing law restricts vessel registration to entities with 100% Indian ownership. The new Bill proposes significant reforms to attract foreign investment. 
  • It also reduces the ownership threshold for Indian citizens/entities from 100% to 51%, enabling more flexibility.
• Expanded eligibility for vessel ownership.
  • Ownership allowed for Indian citizens, Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and companies established under Central Act or State Act having its registered office of business in India.
• Registration of vessels: 
  • The Bill allows the registration of vessels chartered by Indian entities under the bareboat charter-cum-demise, enabling entrepreneurs to acquire ownership of vessels at the end of the charter period. 
• Enlarging the scope of vessels:
  • The existing Act regulates only mechanised ships (engine-fitted vessels) above a certain size, leaving smaller mechanised vessels and all non-mechanised vessels outside its ambit. This regulatory gap has allowed many vessels to operate without adequate oversight.
  • The new Bill seeks to address this issue by expanding the definition of ‘vessels’ to uniformly include a wide range of crafts, including submersibles, semi-submersibles, hydrofoils, non-displacement crafts, amphibious crafts, wing-in-ground crafts, pleasure crafts, barges, lighters, Mobile Offshore Drilling Units (MODUs), and Mobile Offshore Units (MOUs), whether mechanised or not. 
• Regulation on wrecked or abandoned vessels:
  • Vessels that have ceased registration due to wreckage or abandonment must be surveyed and certified seaworthy before re-registration.
• Mortgage Rights: 
  • Establishes clear rules on mortgaged vessels, enabling debt recovery through vessel sales without court intervention for single mortgages. Multiple mortgages require High Court involvement for debt recovery.
• Provisions for Recycling:
  • Legislation encourages vessel recycling within India. Abandoned non-Indian vessels in Indian waters can be recycled under temporary registration.
• Establishment of National Shipping Board: 
  • The central regulatory body will oversee vessel security and port facilities.
• Stricter regulations on Marine Casualties:
  • Imposes stricter norms on polluting or harmful vessels to ensure environmental protection.
• Addressing Marine Pollution: 
  • Sulphur content in marine fuel reduced to less than 0.5%.
  • Ban on single-use plastics aboard Indian ships.
  • Launch of 'Swachh Sagar' portal for waste disposal at ports.
  • Incorporates IMO conventions such as MARPOL, CLC (International Convention on Civil Liability for Oil Pollution Damage, 1969), and Bunker Convention.
  • Aligns India’s framework with international standards for sustainable shipping.

Significance of the bill:

• Boosts maritime trade by expanding ownership and registration options and promoting ease of doing business.
• Encourages sustainability in the maritime sector through recycling initiatives.
• Provides clarity on mortgage rights, expediting financial processes for shipowners and creditors.
• Vessel definition is expected to enhance transparency and ensure comprehensive regulatory oversight in the offshore sector.
• Registration of vessels will be beneficial for capital-deficient entrepreneurs, facilitating entry into the shipping industry without upfront investment.

By fostering investment, enhancing safety, combating marine pollution, and supporting seafarers’ welfare, the proposed reforms promise to unlock the true potential of India’s maritime sector.