Shipping Trade Practices Bill to be finalised by October-end

The Ministry of Law and Justice has finally given its nod to the proposed Shipping Trade Practices Bill, which is expected to be placed before the Union Cabinet by the end of October . The legislation aims at bringing transparency and uniformity in the way the maritime logistical trade practices are carried out in India.

There are currently over thousands of maritime logistical service providers like consolidators (which consolidate goods meant for shipping), non-vessel operating common carrier (NVOCC), customs house agents (CHA) among others. The proposed bill will make it mandatory for all these shipping trade intermediaries to get themselves registered with the maritime regulator - Director General of Shipping (DGS) with a fee of Rs 50,000. It also stipulates a bank guarantee of Rs 5 lakh and a penalty of Rs 2.5 lakh in case of violations of the rules.

The logistical service provider is also required to inform the authority about the various charges levied on it by the consignor.

The draft bill, which was pending for over a year with the Union Law Ministry, has been mired in various controversies. A section of the maritime industry argued that the proposed legislation has trespassed other laws that would in turn create more issues rather than solving it.

Now with the Law Ministry giving its green signal, the shipping Ministry is planning to speed up the process of enacting the Bill in Parliament.

A senior shipping ministry official said, “the law ministry has given its nod for the formulation of Shipping Trade Practices Bill with a few suggestions. We are currently working on it and expect the final bill to be placed before the Union Cabinet in another one or two months. We would like to get it enacted as soon as possible”.

The bill has been a long pending demand of the domestic exporters and importers. In the absence of any industry regulation, exporters complains that the shipping trade intermediaries are arbitrarily imposing new charges without any basis thereby increasing their total cost of transportation.

A Delhi based exporter said, “Earlier the bill of lading was issued free of cost. Now these shipping trade intermediaries are charging anywhere between Rs 500 to Rs 2,000 for issuing one bill of lading. So once certain set of rules and regulations governing the industry are in place, there will be more accountability and transparency in the way our logistical trade practices are carried out”.

“The bill once enacted in the Parliament would act as a dispute settlement mechanism between the exporters, importers and various kinds of shipping trade intermediaries. Currently, they have no other options than to approach the civil court to get their grievance addressed", said, D.T.Joseph, former secretary, Ministry of Shipping.