OIL YOUR OWN MACHINE – F R Chowdhury (1st Batch)

Some time people resort to oiling others’ machines when they think they cannot do much more with their own. We expect the government to establish rule of law and give people the peace of mind. We expect our ministers to be concerned with wellbeing of the people by engaging themselves in planning and development of their respective domain. Sadly our ministers seem always busy in other people’s business. Some time they forget about legal and administrative limitations and indulge in actions that are not expected of a knowledgeable minister. Today we shall discuss about the ministry of shipping. We are going to talk about this ministry because it has been now almost seven years that we have not seen any progress or development in this sector.

We are aware that in the inland sector we have more vessels than what we need. Vessels are often idle for lack of cargo. Some of our industrialists have their own vessels for transportation of their raw materials or finished products. They do not have to hire other vessels. The owners’ association made a plea to the minister for fair distribution of cargo for their survival. With no regard to its legal implications the minister issued a policy decision in the form of a circular. The industrialists challenged minister’s decision in the court of law. The verdict went against the minister’s decision. The court ruled that the minister had no jurisdiction or right to interfere in business. The minister had perhaps forgotten that it was his business to ensure safety, security and environmental protection. The lesson – oil your own machine instead of others’.

The government should ensure that state owned enterprises are operated safely and efficiently. The very birth of state controlled enterprises take place out of necessity. They must serve their own field to prove their worth. We all know that port authorities are created to provide port facilities for growth of trade, commerce and shipping. However, transportation of goods or passengers is not the usual function of a port authority. Apart from private enterprises there are two state owned organisations – Bangladesh Shipping Corporation for ocean going international shipping and Bangladesh Inland Water Transport Corporation for domestic inland shipping. With all the encouragement from the government Chittagong port authority introduced two vessels owned by them for carriage of containers between Chittagong and Pangaon. Later CPA sold them off. Whereas the government should maintain discipline to grow business confidence, it allowed CPA to engage in business that is fundamentally against the charter of their creation. The question is why was it done? The answer is very clear. Sale and purchase business – and commission for all concerned. In Bangladesh state owned enterprises cannot operate freely on their own. They are under heavy bureaucratic control of the ministry. As we view from outside, perhaps the whole thing was thrust up on CPA by the ministry for certain individuals personal gains. These are glorious examples of corruption.

In many of my previous articles I repeatedly mentioned that it was not the role of the government to indulge in business. The government should ensure good governance. It is the duty of the government to make available essential infrastructure to facilitate trade, commerce and business – a good foundation for business to develop and grow. Unnecessary legislation, control, permit and licence create impediments and make room for corruption. It is now about three years that government granted some licences to their political allies to build or buy shallow draft container vessels for operation between Chittagong and Pangaon. Some of these people have already sold their licences to others. Even if there was no corruption involved, it was certainly a reward for political supporters. Now let us look at the question of legality. Neither the merchant shipping ordinance nor the inland shipping ordinance stipulates any requirement of government licence or permit to buy or operate a vessel. Where did the government derive this power from? What happens if any other person builds or buys a ship to operate in the same route? Is there any power under any law to prohibit such operation? This is what we call “moger mulluk”.

We have so far discussed how our politicians and bureaucrats brilliantly derived so many different ways of control, permit and loopholes for corruption. They have gone one step more. This time they have entered the freight market. We all know it is something governed by supply and demand. It is supposed to be a competition. Only the fittest survives and flourishes by providing efficient and reliable service with good economy. The government seems determined to destroy the spirit of free market economy by fixing rates. I do not know where they got the right or jurisdiction to control and gag our trade and commerce.

So long we talked about our inland sector. Let us look at the ocean-going sector. There is a state owned Bangladesh Shipping Corporation. It is supposed to be a business/ commercial concern but in practice it is more than a government department. It cannot take any decision on its own. For every little thing it has to seek ministry’s approval. It hardly got any ship that can be engaged in international trade. Any of those ships comes to any European port; it shall be detained under PSC with multiple deficiencies. BSC cannot even get rid of these ships because of complicated government procedures. Still the corporation has got number of directors, dozens of general managers, fleet of cars and hundreds of employees. After so much of noise about buying a tanker, I believe, it made no progress. In the world market there is no bid system for buying second-hand ships. Once the owner decides, it is snapped up in matters of hours through direct negotiation or through brokers. In the tender-quotation system the seller is bound to ask for at least 50% higher prices because the seller knows the complicated process. The corporation is still kept alive under oxygen because minister and secretary can have the BSC cars for their families. Officials can make overseas trips.

The solution is to employ a dynamic chairman and managing director with full powers to run the organisation on commercial footing. Bureaucratic interference must stop. 50% of the work force must be retired. Obsolete ships should be sold. Identify the needs and purchase ships to diversify operation. The organisation can be turned profitable within a matter of 2/3 years. Bangladesh has lot of highly qualified persons who are also honest. Surely we can find one for BSC. A joint secretary or a naval commodore is not a must. It could be a chartered accountant or even a barrister. We need a dynamic business leader and management expert. One has to understand that BSC is a commercial company and not a government department.
I am very worried about a news item that I came across recently. It is stated that the government has been thinking of new legislation requiring own flag vessels to carry at least 50% of our import-export cargo. We do not have the capacity to carry even 20% leave alone 50%. Any such legislation will seriously hamper our external trade. Instead of facilitating trade it will create bottlenecks and may even prove detrimental to national interest. It will generate higher degree of corruption in the name of granting waivers. When the world is thinking of more and more free trade agreements, we are moving in the opposite direction by imposing trade barriers. We should even remove the existing flag protection ordinance. We should have no controls and restrictions except cabotage, which is carriage of cargo and passengers within the country.

Now we come to the point with which the article started. There is enough to do instead of oiling unnecessary machineries. Bangladesh needs a modern merchant shipping act to allow growth of our national fleet. The department of shipping should be renamed as department of maritime affairs. There should be open debate and public consultation whether we should make ours an open register. We must remember that from 01-January-2016 Member State’s Audit is becoming compulsory. By then we must have appropriate legislation and administrative arrangements in place to comply with all applicable international instruments. Soon after that we will have the requirement for placing seafarers’ status of certificates on accessible website. We must also implement ILO-MLC-2006 and regulate recruitment and placement in an appropriate manner. We must privatise this business but maintain effective control to protect our interest.

Juldia Marine Academy needs another master plan to have all latest simulators including those for ECDIS (Electronic Chart Display & Information System). It is time for the Academy to diversify to include offshore training including DP (Dynamic Positioning) training. Bangladesh must establish GMDSS (Global Maritime Distress & Safety Signals) and LRIT (Long Range Identification & Tracking) facilities. Seafarers training, certification and other documentation must be streamlined free of corruption. Similar attention should be paid for training GP (General Purpose) Ratings.
State owned BSC must be salvaged and revamped. Necessary course of action has already been discussed. The minister must quit the board and make the board answerable to him for its performance. BSC must operate as a business venture for profit apart from providing business and employment to others. The first and foremost target is profit.

In the inland sector – essential river ports must remain navigable for which BIWTA and WDB must work in a coordinated manner for dredging. Navigational marks need to be improved. Inland river ports that were established at the time of creation of BIWTA now need to be modernised.
Government should consider setting up a separate directorate of inland shipping safety. This directorate should take over survey and certification of inland vessels. Masters and drivers’ examination and certification may also be conducted by this newly formed organization. Certain changes are overdue. All candidates for such examination should be able to produce SSC apart from necessary service on inland vessels. They must also (compulsorily) undertake three to six months structured course and pass the examination in approved institute before they can take the final examination. This will improve the situation to a large extent.

Finally I would request the government to prevent themselves from giving vague statements. If a ship-owner finds it viable s/he will operate service to Kolkata. There is no law that prohibits it. Similarly they do not require any governmental approval for such service. I was also surprised to read the news item that government was planning direct shipping service with Indonesia. There is nothing that prohibits this. If BSC finds it profitable they will operate direct service. However, they must not do so only because the minister wants it. I shall conclude this article by calling on the government to oil its own machine.

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London, 31-October-2015

<fazlu.chowdhury@btinternet.com>