South Africa aligning its maritime industry with the globe through the Merchant Shipping Bill, 2020

February 1st, 2021
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Picture source: Gallo Images

The South African government aims to bring the Merchant Shipping Bill, 2020 (the Bill) into law with a view of aligning the South African maritime industry with that of the international markets by promoting inclusive growth, by prioritising local industry, while meeting its international obligations as a party to various bilateral, multilateral agreements and duly adopted conventions.

Pleasure crafts are watercrafts that are used for personal recreation and naval ships are used for military purposes. These contrast with a merchant ship, merchant vessel, trading vessel, or merchantman, which are watercrafts that transport cargo or carry passengers for hire. Considering the important function of merchant ships, the South African government believed that there was a need for the regulation of such transportation.

In 2017, the Comprehensive Maritime Transport Policy (CMTP) was approved as an all-inclusive policy to guide the integrated governance, regulation and development of the ocean economy, and in particular the maritime transportation in South Africa (SA). Currently, all merchant shipping and matters incidental thereto are governed by the Merchant Shipping Act 57 of 1951 (the Act). Keeping in line with the aims of the CMTP, the Act will soon be repealed by the Bill, which aims to address the key issues faced by the maritime industry, which not only affects the international maritime sector, but also the local maritime sector in SA. The Bill aligns with the shipping provisions of the CMTP. The Bill was presented and discussed by stakeholders in meetings convened nationally by the Department of Transport during 2018 and 2019. The Bill was tabled and approved by the Directors General Cluster of International Cooperation, Trade and Security Cluster and the Economic Cluster.

The Merchant Shipping Bill will be amended to realise the vision of government, which is primarily aimed at reviving the maritime transport sector and enhancing its contribution to the growth and radical transformation of the South African economy. South Africa has typically been regarded as having the potential to become an essential contributor and powerhouse to the international maritime industry. The government’s primary course of action in this regard is to align national legislation with various international conventions to which SA is party to as well as the aims of the international community as a whole.

The Merchant Shipping Bill aims to –

  • provide for the powers and duties of the minister and the South African Maritime Safety Authority in the administration of the Act;
  • provide for the registration and licensing of ships in South Africa;
  • provide for the application of the prevailing labour laws to seafarers, the conditions of employment of seafarers and the health and well-being of seafarers on board vessels;
  • promote the safety of life at sea and to establish inspection and enforcement mechanisms, including those for marine casualties and crimes committed on ships;
  • provide for the regulation of marine traffic and for legal proceedings and jurisdictional matters; and
  • recognise and incorporate international conventions to which SA is bound in terms of the provisions of the Constitution and ensure its incorporation into law in terms of laws repealed by the Act.

Once approved the Bill aims to effectively amend and repeal several related marine laws including the following – 

  • repeal the Act;
  • repeal the Marine Traffic Act 2 of 1981;
  • repeal the Ship Registration Act 58 of 1998;
  • amend s 1 of the National Ports Act 12 of 2005; and
  • repeal Annexure 1 of the Ports Rules GN255 GG31986/6-3-2009.

‍It is, therefore, anticipated that a more than 400-page document is likely to draw significant comment from a wide spectrum of industry sectors ahead of the promulgation process.

Despite the attendance at the Johannesburg and Cape Town sessions being low, some stakeholders say that the document deserves significant scrutiny and question whether it will pass in its current form.

Some concerns have been raised regarding the aim of government to boost future economic growth underpinned by an inclusive maritime sector warning that legislation should not be drafted at the expense of the nation and with narrow interests in mind.

The government believes that SA needs to play a bigger role in shipping transport in terms of its exports and imports, emphasising the need for additional tonnage on the South African ships’ registry.

To this end, the Bill seeks to re-integrate the Ship Registration Act and provides for a number of new provisions in this regard including:

  • The Chief Executive Officer of the South African Maritime Safety Authority will become the Ships’ Registrar.
  • The introduction of a tonnage based ship registration fee system.
  • Mortgage as a security for a loan.
  • Mortgagee will not be deemed the owner of the ship.
  • Mortgagee has absolute power to dispose of the ship or share subject to a limitation where there must be concurrence with other mortgagees.
Coastal shipping

The Bill states: ‘No ship, other than a South African owned ship … , is permitted to engage in coastwise traffic’ for the conveyance of goods between ports in SA. It further states that ships engaged in coastal shipping need to apply for a licence to do so and that this licence will be issued for a period of ten years.

If and when the Bill in its current form comes into effect, foreign vessels will need to choose one port of call in SA to offload all cargo destined for SA irrespective of its ultimate destination within the country. The government believes that this will help stimulate opportunities for local ship owning along the country’s coast – and ultimately within the region of the Southern Africa Development Community.

Ultimately this means that cargo may not be transhipped via a coastal shipping network and may end up being diverted to trucks and rail for onward moving. The government has conceded that more studies relating to the implications for ports and logistics will need to be undertaken to ensure adequate planning in this regard – and highlights that a cabotage regime could only be fully implemented over a number of years.

Concerns have been voiced regarding further bureaucracy and market hurdles which may ultimately deter international markets and destroy local ports despite the ‘good intentions’ on the part of the state.

Seafarer employment

Another section of the document that will most likely receive significant scrutiny is the chapter relating to seafarers. Given the global nature of the shipping sector, provision for seafarers to access the Commission for Conciliation, Mediation and Arbitration and the Labour Court, as well as the legal right to strike will draw some comment from industry.

Some discussion in this regard has already taken place highlighting a few grey areas that will necessarily need to be addressed in terms of wording specifically relating to discipline and offences.

Promulgation

The Bill was published in GenN148 GG43073/6-3-2020. All interested persons were requested to submit their written comments in connection with the draft Bill within 60 days (ie, by 5 May 2020), and was extended on 6 July 2020 for an additional 30 days from the date of the publication of the notice in the Government Gazette. Stakeholder and public meetings in this regard were scheduled to be held in March 2020, however, these meetings had to be postponed due to the lockdown regulations caused by the COVID-19 pandemic. The initial deadline had been extended to the end of May 2020 (for public consultation) and to the end of June 2020 (for members of the Maritime Law Association of South Africa).

These comments will be reviewed over the period of one month after the submission deadline and the revised Bill, along with the comments, is likely to be sent to the state advisers by the end of June. The advisers will have at least 40 days to consider the revisions and the comments before the document is passed on to the Director General Cluster and finally to Cabinet. The Bill will likely only be tendered to Parliament in early 2021.

Considering the broad ambit of the Bill that aims to repeal three previous Acts in full, the industry will have to mobilise effectively to ensure that the final product meets the needs of current and the future potential landscape envisioned for the maritime industry (http://maritimereview.co.za, accessed 2-12-2020).

Nicholaas Kade Smuts LLB (Unisa) LLM Shipping Law (UCT) is a legal practitioner in Cape Town.

This article was first published in De Rebus in 2021 (Jan/Feb) DR 16.

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