Global Shipping Regulations

GS2 – International Relations

Context

Recent maritime incidents, such as the fire on MV Wan Hai 503 and the sinking of MSC ELSA 3 near Kerala, have spotlighted safety issues and environmental concerns linked to international shipping.

International Governance of Maritime Transport

Role of IMO:
The International Maritime Organization (IMO) establishes global guidelines to ensure maritime safety, security, and environmental protection.

Flag State Duties:
The country under whose flag a ship sails is responsible for ensuring compliance with IMO standards by issuing certificates and conducting inspections.

Flags of Convenience (FOC):
Many ships are registered in countries with relaxed regulatory frameworks—such as Liberia and the Marshall Islands—to lower operating costs. These FOC regimes account for more than 30% of the global merchant fleet and raise concerns about regulatory oversight.

Port State Controls:
Nations enforce IMO rules by inspecting foreign vessels at their ports through regional cooperation mechanisms.

Global Fleet Ownership:
China and Greece collectively own about a quarter of the world’s merchant ships.

India’s Maritime Presence:
India operates nearly 1,500 commercial vessels and processed around 1.4 billion tonnes of cargo in 2023–24.

India’s Regulatory Framework

Directorate General of Shipping:
Under the Ministry of Ports, Shipping and Waterways, this authority ensures that international maritime conventions are implemented domestically.

Liability and Insurance in Maritime Trade

Compensation for Cargo Loss:
Shipowners are liable to cargo owners (holders of the Bill of Lading) for any lost goods.

Unlimited Liability for Pollution:
Under international agreements, shipowners bear full, uncapped responsibility for environmental damage caused by pollution.

Insurance Mechanisms:
Protection and Indemnity (P&I) Clubs provide insurance coverage to shipowners for risks such as cargo loss, oil spills, and third-party claims.

Understanding Key Concepts

Bill of Lading:
This document serves as a contract between the shipper and carrier. It outlines shipment details and delivery terms and functions as a legal title to the goods, enabling the holder to claim ownership and compensation in case of loss.

P&I Clubs:
These are cooperative insurance groups formed by shipowners to pool resources and provide coverage for costly liabilities, including environmental clean-ups and legal fines.

Wreck Removal under the Nairobi Convention

Owner’s Responsibility:
If a shipwreck occurs within 200 nautical miles of a country’s coast, the shipowner is obliged to remove it and bear all associated costs.

State Intervention:
Should the owner fail to act, the coastal state can intervene and recover the expenses from the shipowner. In India, this is enforced by the DG Shipping, as seen in the MSC ELSA 3 case.

Nautical Mile:
One nautical mile equals 1,852 meters and corresponds to one minute of latitude.

Nairobi International Convention on the Removal of Wrecks (2007)

Objective:
This convention provides a uniform legal framework for the swift and safe removal of shipwrecks posing risks to navigation or marine ecosystems.

Coverage Area:
Primarily applies beyond the territorial sea, but states may choose to extend its application within 12 nautical miles.

Governance:
The IMO oversees its implementation.

Territorial Sea:
A sovereign maritime zone extending up to 12 nautical miles from a nation’s coastline.

IMO Conventions and India’s Participation

Convention	Focus Area	India’s Status
MARPOL (1973)	Pollution prevention in six areas	Yes
Bunkers Convention (2001)	Liability for fuel oil pollution	Yes
Nairobi Wreck (2007)	Mandatory wreck removal	Yes
Ballast Water (2004)	Stops invasive species via ballast water	No
HNS (2010)	Hazardous cargo liability	No

 

International Maritime Organization (IMO)

• A UN-specialized agency created in 1948 to regulate shipping safety, security, and marine environmental protection.
• Headquarters: London.
• Members: 176, including India since 1959.
• India is an active council member and contributes to policymaking.
• The IMO formulates binding norms on vessel design, operation, seafarer standards, and pollution control.
• Structure: Operates through its Assembly, Council, and key committees such as the Maritime Safety Committee (MSC) and the Marine Environment Protection Committee (MEPC).