by F R Chowdhury
Banking, insurance, shipping and aviation are perhaps the most international business in the world. Arguably shipping is also one of the oldest businesses in the world. Banking and insurance followed it as essential partners. Shipping is so international in nature that law of any one individual country cannot be applied to it. For shipping to operate globally, it requires internationally agreed common standards and procedures. That is where we come to the need for international conventions and protocols. Normally diplomatic conferences are convened by the United Nations or one of its relevant agencies where national representatives sit together for days to come with internationally agreed rules and procedures known as international convention. Such internationally agreed conventions existed before the creation of the United Nations. The International Association of Maritime Lawyers commonly known as CMI used to request the Belgian Government (because the association was located there) to call diplomatic conference for adoption of maritime conventions. CMI would normally introduce a draft document in the conference to start the discussion. The delegates after due consideration and deliberation would adopt an agreed document known as the convention. Then it would be for each independent and sovereign state to consider and become a party to the convention. International conventions cannot be applied and enforced directly. To the best of my knowledge there are only three international courts or tribunals that apply the provisions of international treaties directly. They are International Court of Justice, International Criminal Court and International Tribunal for the Law of the Sea. In all other cases the provisions of international conventions have to be given the force of law by the Party States and enforced by them. Again we require the services of lawyers with drafting expertise to transpose the provisions of international conventions (to which the state is a Party) into national laws. The Party States normally apply the common standards to all ships within its waters without any discrimination and thereby force other non-party states to come within the umbrella of the convention. The world of shipping and marine environment could not have been as safe as today without the mechanism explained above.
The United Nations has directly adopted the Law of the Sea Convention commonly known as UNCLOS-82. This is the paramount sea related convention, some time also called the umbrella convention that can be signed not only by states but also other UN agencies. Both IMO and UNEP work together for protection of the marine environment within the frame-work of UNCLOS-82. Two international bodies have already been set up and functioning under UNCLOS-82. They are ITLOS (International Tribunal for the Law of the Sea) based in Hamburg and ISA (International Sea-bed Authority) based in Jamaica. International Maritime Organization (IMO) is the UN agency that calls for most of the diplomatic conferences for adoption of conventions relating to maritime safety, security and protection of marine environment. International Labour Organisation (ILO) continues to deal with seafarers’ living and social conditions. Most of the trade, commercial and legal matters are dealt with by UNCITRAL. The radio communication sector is looked after by the ITU in collaboration with the IMO.
It is not possible for states to make one-sentence law to state that a particular convention shall apply to the country. It is because the language and format of the convention is different from any national legislation. The convention will evidently define some functions and responsibilities of a Party State. The Party State through its national law shall define and determine as to which officials will be accountable for such responsibilities. The law shall have to outline the procedure for any prosecution against violation or non-compliance of the law. It is also important to note that international conventions do not prescribe any common fine/ penalty; and a national law will never be complete without penal provision. The national law shall also designate the authority that can grant any exemption under the law or prescribe acceptable equivalent. There would be many more similar matters to be clarified in the national legislation to ensure it can be fully operational and not create any void in the process of litigation or arbitration.
The way it is not possible to turn a convention into national law by mere one sentence, the same way it is also not practicable to reproduce every word of the convention. Any such attempt will make the law unnecessarily lengthy and will also require amendment of the law for every amendment of the convention. The first and foremost thing to do is to ensure that the State is already a Party to the Convention. Every State must understand that any financial implications would be borne by ship-owners as done by ship-owners from other countries and that own flag ships would be subject to convention requirements while visiting foreign ports under PSC (Port State Control). So it only makes good sense to become a Party to the Convention to remain in the forefront of the maritime nations. Once a Party, the state has every right to refer to it and utilise its text. Now it becomes easy to draft legislation by defining the convention and then making direct reference to various articles and chapters.
Can we set our standards higher or lower than the convention standards? We cannot lower the standard because by accepting or acceding to the convention we have already committed ourselves to the convention standards. Besides our ships visiting other countries will be subjected to convention standards. However, we can certainly set our standards higher than the convention only for our own ships but cannot apply that to visiting foreign ships. The best is to go by the convention standard.
Maritime legislation will not only cover operation of merchant ships for carriage of cargo and passengers, it will cover all other operational activities at sea so far safety, security and protection of the environment are concerned. It will cover fishing vessels, pleasure craft and off-shore activities for oil, gas and other mineral resources – anything that operates at sea. It is through the maritime legislation that the maritime administration shall play its role.
Drafting maritime legislation is not all about transposing provisions of international conventions into national law. There is more to it. Maritime legislation shall also bear a reflection of national maritime policy. It shall define national flag ship – whether ships owned by own nationals alone can be registered or it shall be open to register ships jointly owned with foreign nationals or even register ships wholly owned by foreign nationals. Where registration of a ship wholly owned by foreign nationals is permitted, the law may require such ownership to be shown under a local company. The company law (some time formulated specifically for registration of ships) may allow formation of such a company directly by foreign nationals or acquiring shares, rights and privileges of an existing company. The country may even have a very liberal policy of registering ships under foreign ownership so long a local representative is available. There is as yet no international convention in force that regulates this aspect. It is for each state to decide its own policy and draft legislation accordingly. The state will also spell out in its legislation whether domestic trade will be restricted only for own flag vessels (commonly known as cabotage).
There is another very important factor that should be preferably spelled out in national maritime legislation especially if the state has any ambition to attract foreign owned ships under its flag as an open register. How the ship-owners will be taxed on their profit or loss? Will it be done on the basis of annual financial audit report certified by chartered accountants or the ships will pay some fixed rate of annual fees based on the size of ships (commonly known as tonnage tax, a sort of capacity tax in economic terms). In case of tonnage tax the Government will not have any headache to check accounts to prevent any tax fraud.
An open register would normally try to attract ships on its register by its open and liberal policy such as no restriction of nationality of owners and seafarers employed on the ships coupled with low tonnage tax. They would expect to earn sufficient revenue by way of fees for registration of ships and mortgages, tonnage tax and other fees for various licences, certificates etc. They would also authorize most of the classification societies to carry out the statutory survey, audit and certification on behalf of the owners.
Coming back to the point of drafting legislation, we have to deal with the subject of marine casualties and follow-up inquiry/ investigation in a manner that satisfies the international convention requirements as well as other legal and compensation regimes. Every maritime convention such as UNCLOS-82, SOLAS-74, LL-66, MARPOL-73/78 and STCW-78 requires administration (flag state) to conduct inquiry into causes relating to the accident/ casualty. The purpose of such investigation is to analyse causes and reasons so that remedial measures can be taken to avoid similar casualties in future. The idea is to protect lives, properties and environment. IMO wants such reports to be publicised for lessons to be learnt. It is mainly to review of existing legislation (national and international) including safety requirements and procedures. The convention requirements are solely for the cause of safety and not for punishing individuals. No provision for punitive measures should be included within the scope of the safety inquiry. This is why in most countries safety inquiries are also known as preliminary inquiry and conducted by professionals. It is important to note that for the cause of safety the report shall be publicly available but not referred to any court of law.
However, where the severity of an accident/ casualty gives rise to public concern, the minister acting on behalf of the state may order a formal/ judicial inquiry headed by a serving or retired judge. Such inquiry shall normally include an independent professional person either as a member or as assessor. The court shall have the powers to call witness and take deposition under oath. The court may suspend or withdraw any professional certificate where the court is satisfied that due professional diligence was not applied. However, no such action shall be taken without giving the accused every opportunity to defend. The court may also impose any fine/ penalty or jail term for any criminal negligence. Port State Administration may also apply its own jurisdiction over any accident/ incident that take place within its waters. The procedures relating to inquiry/ investigation and proceedings stated above shall in no way affect the right of any aggrieved party or individual to sue for compensation.
There are many important international conventions relating to maritime and shipping. An ideal national merchant shipping act shall take into consideration all of them. They are: Tonnage-69, Load Line-66, SOLAS-74, COLREG-72, MARPOL-73/78, STCW-78, FAL-65, SAR-79, Intervention-69, CLC-92, Fund-92, CSC-72, PAL-74, LLMC-76, OPRC-90, Salvage-89, Wreck-2007, Rotterdam-2008, Lien & Mortgage-93, Arrest-99, ILO-185 and MLC-2006. Merchant shipping commercial legislation should include – carriage of goods, ship chartering, marine insurance (hull and machinery, P&I and cargo), carriage of passengers etc.
Like all other legislative drafting the following points shall be taken into consideration: Pre-amble (where necessary), Title, Commencement (date of coming into force), jurisdiction and application, definition of terminologies used, purpose (reference to international convention, if any), mode of operation, requirements to be complied with, lead agency to monitor and oversee, grant of licence, exemption or equivalence, violation or non-compliance, prosecution and penal provision, any reference to special court or other court’s jurisdiction, provision for appeal, powers to make regulations or explanatory/ guidance notes, repeal/ revoke any existing legislation and immunity for actions taken in good faith etc. etc.
International conventions are made keeping in view all aspects of every issue. For example for protection of marine environment there is MARPOL-73/78 that gives requirement for design, construction, equipment and operational guidance to reduce or minimise chances of pollution. Then there is CLC-92 to ensure the ship has an insurance to pay for any accidental damage to the environment. Yet, there is OPRC-90 to ensure that contingency plans are in place to combat and restrict the extent of pollution. The State may sue for damages caused including expenses incurred to reduce the damage. The logic is that we have one world and we must protect it.
Another complex issue is to blend the requirements of various conventions relating to lien, claim, arrest of ship and eventual sale of ship by a court; and priority of settlement of claims. This has to be done in a logical manner to satisfy all concerned proportionate to their stake. Similarly in respect of environment, the legislation has to take on board total requirements – technical as well as those relating to liability regime.
It is a vast subject but I tried here to summarize the essential contents. I hope I have been able to provide an outline as to how maritime legislation should meet domestic as well as international obligations.