THE government is set to table during this Parliamentary session a Bill for enactment of the National Shipping Agencies Act. But the stakeholders in the maritime industry have called for review of the provisions under the Bill to, among other things, accommodate the establishment of the Tanzania Maritime Authority (TMA) to regulate maritime affairs and activities in the country. Our Staff Writer FAUSTINE KAPAMA reports…
IT may be recalled that after the sinking of MV Bukoba in 1996, the United Republic of Tanzania formed a committee to look into the possibility of establishing a National Maritime Safety Agency. The committee had members from both Zanzibar and Tanzania mainland.
The committee in 1997 recommended that a Tanzania Maritime Safety Authority be formed. The Maritime Safety Authority was not formed, and as a result, two statutes regulating the registration of ships in the United Republic of Tanzania were enacted.
There is Merchant Shipping Act, 2003 for the mainland and the Maritime Transport Act, 2006 of Zanzibar. Ships registered through these legislation, fly the maritime flag of the state of the United Republic of Tanzania.
Complex issues have arisen on this practice. The Maritime Law Association of Tanzania (MLAT), as one of the stakeholders in maritime industry notes that the Bill in its Sections attempts to resolve complex issues by indicating the application of the Proposed Act.
Such Bill on the Maritime Transport Sector seeks to establish a National Shipping Agencies Corporation (NASAC), which is a public corporation and a business organization that would, at the same time, be vested with powers to regulate the Maritime Transport Sector in Tanzania.
However, Section 2(1) of the Bill provides that the Act shall apply to shipping services at the sea ports and inland waterways ports in mainland Tanzania. This means therefore that NASAC’s business operations will be restricted to Tanzania mainland.
Whereas Section 2(2) of the proposed law, nevertheless, states that matters of Maritime Administration, Marine Environment, Safety and Security shall apply to the United Republic of Tanzania. Section 11 of the Bill grants NASAC the Authority to administer The Merchant Shipping Act but not the Zanzibar Maritime Transport Act.
Yet, Section 2(2) of the Proposed Act extends the functions of NASAC to Zanzibar. MLAT has the opinion that a national or Tanzania Maritime Authority, would eliminate some of the complex issues and exercise its Authority on the matters outlined under Section 2(2) of the Bill.
It will administer both the mainland Merchant Shipping Act and the Zanzibar Maritime Transport Act. Seasoned marine and maritime law expert, Capt Ibrahim Bendera, points out that the established TMA would have major objectives and functions, notably to monitor, regulate and coordinate activities in the maritime industry and have responsibility to implement the provisions of enactments on shipping.
“Tanzania Maritime Authority shall have full control on flag state control over all ships registered in the United Republic of Tanzania and shall have port state control on all ships with foreign flags when in the waters of the United Republic of Tanzania,” he says.
According to him, many countries with coastlines have such authorities in place. Our neighbour Kenya, he says, has one law called the Kenya Maritime Authority Act, Cap 370 of 2006, which establishes the Authority.
Capt. Bendera discloses further that South Africa, a SADC member State established such an Authority in 1998 under the South African Maritime Authority Act 1998. Whereas Ghana have also a Maritime Authority established under the Ghana Maritime Authority Act, 2002.
“We could also borrow a leaf from Australia which in 1990 established a Maritime Safety Authority through the Australian Maritime Safety Authority of 1990,” he says.
He concludes, therefore, that MLAT highly recommends that the executive reconsider its intention to proceed with the Bill and instead bring forward a New Bill for the establishment of a Tanzania Maritime Authority on the basis of Part III of the Bill.
On October 26, 2017, a stakeholders’ meeting was convened in Dar es Salaam to scrutinize the proposed law and came up with a number of observations, including Section 7 providing a sole mandate in NASAC objectives and functions to the extent of a guaranteed monopoly in the shipping agencies business.
The NASAC, as a public corporation, would enter a business where it would have to compete with other shipping agencies, guided by the rules of the free market economy and free trade.
At the same time, the Director General of NASAC is given powers to obtain information, documents and evidence from competitors, as per section 8 and section 9 gives him the power to suspend and revoke licenses or permits issued to NASAC competitors.
Section 12(1)(a) of the Bill gives NASAC, as a regulator of this industry, the power to issue, renew and cancel licenses. The stakeholders also noted with concerns that the funding of their new competitor will partly come from public funds (Section 27 (1) (a), that is moneys appropriated by parliament.
It was, therefore, observed with great concerns that the proposed public corporations engaged in the business of shipping agencies, through the provisions of the proposed Act, will stifle competition and establishes a monopoly.
This is a worrying situation to private shipping agencies. Participants to the meeting observed that NASAC would be acting in conflict. It is clearly a conflict of interest situation probably aimed at consolidating its monopoly and not being able to perform PSC over ships which it represents.
Law Professor Costa Mahalu takes a critical eye on the Bill, especially on provisions relating to the establishment of NASAC. He says that it is clear that the government intends to establish a shipping agency which will operate commercially.
“We note that however, the Bill intends to repeal the Shipping Agency Act, Cap 415 as stated in Section 55 (1). Now, by doing so and taking into consideration the contents of Part I, especially Sections 5 and 6, the Bill makes NASAC to be a Government Monopolistic Corporation,” he says.
However, he says, NASAC shall have the ability to enter into contractual obligations with other persons or groups of persons by means of “…….. concession, joint venture, public private partnership, or other means and to delegate its own functions of providing shipping agencies to one or more parties.”
According to Prof Mahalu, who also doubles as MLAT Chairman, under such circumstances NASAC will be a Monopolistic Government Business Organ deciding which other entity it can cooperate with and in which way.
It is a non free trade action abolishing the achievements brought by Cap 415. He says that MLAT was of the view that Cap 415 should not be repealed. Instead, the government should use it to establish a shipping agency, in the name of NASAC, in the form of a company limited by liability, in which the government could have 100 percent shares.
Thus, he says, NASAC would compete with other shipping agencies in Tanzania. Such Tanzanian shipping agencies will abide by the law, in particular, Section 7 (a) (b) of Cap 415, where Tanzania nationals will have more than 50 percent of the shares.
He also observes that Section 6 (1) (w) of the Bill provides for NASAC’s functions, among others, as that of providing or arranging for clearing and forwarding of cargo. Section 3 of the Bill, however, provides that “clearing and forwarding” to mean the function of processing shipping documents for import or export through customs control will be conducted by NASAC.
In MLAT’s opinion, he says, such provision should be removed because all the functions of customs control are already monitored and regulated by the Tanzania Revenue Authority and are conducted by customs agents as specified in the East African Community Customs Management Act, 2004.
Section 145 of the Act provides, “The Commissioner may license a person to act as agents for transacting business relating to the declaration or clearance of goods or baggage other that accompanied non manifested personal baggage of a person travelling by air, land or sea.”
It is apparent that the intention of the Bill is to double license custom agents by the law of this nation recognizing them as two functioning identities having the names of clearing and forwarding agents in one law and also customs agents in another law.
“We strongly recommend that NASAC should not interfere with the supervision or regulating the customs agents who are at the same time supervised by the Tanzania Revenue Authority by simply naming them as clearing and forwarding agents,” Prof Mahalu says.
He adds that if NASAC would want to conduct the functions of a customs agent it will have to register itself with the TRA as a customs agent.