Bangalore: In a bargaining move aimed at securing full-time membership for India on a body that classifies and certifies the design, construction and maintenance of ships globally, India’s shipping ministry has decided to revoke the permission given to six major entities in this field to operate in the country from August.
India’s maritime administration, the Directorate General of Shipping (DGS), sent out notices last week to six of the 10 full-time members of the International Association of Classification Societies, or IACS, which works as per the requirements of the International Maritime Organization, or IMO, to wind up their statutory survey operations by August.
Change of guard:A file photo of JNPT. The Union government says the Indian Register of Shipping is in a position to undertake surveys mandated by the International Maritime Organization to periodically check sea-worthiness of ships. (Photo: Ashesh Shah/Mint)
As a result, these entities will be derecognised by India and barred from conducting statutory surveys on Indian flag ships or ships that are registered in India. The Indian Register of Shipping, or IRS, will then have monopoly over such activity in India. Statutory surveys are performed periodically to ensure that ships are maintained as per IMO specifications.
The 10 full-time members of the IACS include American Bureau of Shipping, Bureau Veritas, Det Norske Veritas, Germanischer Lloyd, Nippon Kaiji Kyokai, Lloyd’s Register, Russian Maritime Register of Shipping, China Classification Society, Korean Register of Shipping and Registro Italiano Navale. Of these, the first six were permitted to operate in India, remaining four were not.
IRS is currently an associate member of IACS but this status will expire soon; Mint could not immediately verify when J. C. Anand, chairman, IRS, maintained there is “no time- limit for the associate membership granted to his firm”.
IACS officials were unavailable to comment for this story.
The so-called classification societies have developed rules and regulations that set standards for the design, construction and maintenance of ships. These societies are authorized to act on behalf of various maritime administrations such as India to verify that ships comply with various codes of IMO, the global maritime regulator, on sea and cargo worthiness. Ships that are not certified by a classification society are not allowed to take to the sea. More than 90% of the world’s cargo-carrying ships are covered by the classification design, construction and through-life compliance rules and standards set by the 10- member societies and one associate of IACS.
“Now, the government is satisfied that the Indian Register of Shipping is in a position to undertake the entire survey requirements of the government of India,” said the notice served on the classification societies by the DGS.
”The government has taken the decision after carefully monitoring and evaluating the performance of IRS over the years. In fact, it is in line with the practice adopted by several international maritime administrations,” said Anand, chairman of IRS. But, there are other reasons for derecognizing the IACS members over statutory surveys.
“Looking at the stature of the Indian maritime industry, it is high time IRS was given the status of a full-time member of the IACS,” said an official with the shipping ministry who asked not to be named.
“The decision was also taken to strengthen our own national institutions.” Several non-members, including India, are trying to break into IACS without success. India’s decision, however, will not affect the ability of the six entities to carry out design and plan approval or construction surveys of ships.
The decision only relates to statutory surveys. They are allowed to carry out other activities such as design/plan approval and construction survey of ships,” said an official with the DGS. The official did not want to be identified.
However, industry experts do not preclude the possibility of IRS also getting full responsibility of design/plan approval and construction survey of Indian registered ships. “At this rate, it won’t be long before IRS gets full responsibility over these activities also,” said a shipping industry official who asked not to be named.
Anand believes that the government’s decision will not harm its relationship with other full-time members of the IACS or lead to a retaliation from other maritime nations. “We have very good relations with all member of IACS. This will not put us in confrontation with other full-time members who are active in India,” Anand said.
The government’s decision to revoke the permission given to the six firms to carry out statutory surveys comes a few months after inspectors from the European Commission (EC)’s competition directorate raided the offices of many members of the IACS on 29 January to investigate collusion allegations.
The raids came after non-members such as Poland’s society PRS accused IACS of excluding it and other non-members from talks overframing common structural rules and technical standards on safety.
The EC was acting on information “suggesting that the practices of IACS or its members had sought to reduce the level of competition between IACS members and to foreclose competitors (non-members of IACS)”.
IACS chairman Tor E Svensen had denied this charge. EC investigations are still on.