Amend shipping law for blue economy gains

Posted On Tuesday, 21 May 2019 09:14
An image take at the inland container depot in Nairobi. An image take at the inland container depot in Nairobi.

By Andrew Mwangura

Current government plans on shipping and blue economy calls for an immediate re-look at the Merchant Shipping Act 2009.

A clause in the Act blocks foreign shipping lines from engaging in other businesses and confines them to cargo haulage — and that has been the case for the past 10 years that the law has been in effect.

BARRING OUTSIDERS

There is a need to repeal or amend the draconian Act and come up with a Cabotage Law.

Cabotage by merchant ships is prohibited in most countries that have a coastline. The aim is to protect the domestic shipping industry from foreign competition, preserve domestically owned shipping infrastructure for national security purposes and ensure safety in congested territorial waters.

The purpose of Section 16 of the Merchant Shipping Act is to allow the “local talents/entrepreneurs” to venture into these jobs/businesses of providing services to ship owners — both local and foreign — while barring outsiders from setting camp in Kenya to provide services that can otherwise be offered by locals.

A change in the law, however, should take into consideration the realities and dynamics in the maritime world.

One is that shipowners nowadays do not necessarily operate their own vessels. They “outsource” many services — including technical management (such as superintendence), commercial management (shipbrokers and supercargoes), crew management (crewing agencies) and bunker supply.

A typical shipping line will have a very small office in, say, the UK, a technical management service office in Hong Kong, a crewing office in Manila, a commercial management office in New York and a bunker supply office in Singapore.

The shipowner will then concentrate on trading his own assets (the ships) or chartered assets on the lucrative trade routes. He will be dealing with bankers, shipbuilders, insurers and other stakeholders.

UNEMPLOYED YOUTH

The question of cabotage is a complicated one since the East African Community Customs Management Act 2004/2009/2011 (as amended) is interpreted differently by Kenya and Tanzania, leaving foreign ship owners baffled.

For instance, the Kenyan coast does not have safe and sheltered anchorages for transshipment, and that has to be carried out within the port limits. On the other hand, Tanzania and Mozambique allow their coast to be used for such operations.

But then, how many Kenyan- or Tanzanian-flagged coastal vessels can take part in these operations?

There is a need to support the blue economy implementation team in its bid to revitalise the Kenya National Shipping Line (KNSL) and, hence, create jobs for the seafarers and other unemployed youth, especially in the coastal region.

The President has a political and moral responsibility to effect plans for harnessing local national resources and ensure they are organised in a manner that advances the social and economic well-being of all citizens. Indeed, it is a constitutional duty.

This responsibility is more critical to the coast residents, who have for many years been marginalised, resulting in high poverty levels and massive unemployment. This has caused a social crisis in the form of violent extremism, drug abuse, radicalisation and hopelessness.

Mr Mwangura is the convener, Seafarers and Mombasa Youth Assembly. This email address is being protected from spambots. You need JavaScript enabled to view it.. This opinion piece appeared in the Daily Nation on May 14th, 2019.