Senate invites legislative proposals to regulate shipping companies
KARACHI: There does not exist a legislation under which the government could compel shipping lines to provide relief to the importers, therefore Deputy Chairman Senate Saleem Mandviwala has invited proposal so that such a legislation could be constituted, Vice President Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Khurram Aijaz said.
“At a recent meeting at Sindh Chief Minister House, we informed Deputy Chairman Senate about the non-cooperation of shipping companies. We also informed him of the Ministry of Maritime Affairs’ stance that the shipping companies were not in its legislative control,” Aijaz said adding Saleem Mandviwala invited proposals so that such a legislation could be constituted.
It is noteworthy that Pakistani ports are the most unregulated in the region with lax rules having no clear guidelines, regulatory framework or specified tariffs for container detention, Terminal Handling Charges (THC) and other miscellaneous charges outside the THC which are unjust and illegal.
To some extent statutory provisions in the Customs Act 1969 and relevant Rules, confer powers to the customs authorities to regulate the functions of shipping lines and monitor their charges. But in the present unprecedented crisis of COVID-19, FBR and Customs Preventive have also failed to come to the rescue of importers and protect Pakistan’s economic interests in the face of immense clout and ability of the shipping lines to circumvent any such leverage by Customs.
VP FPCCI criticized the very shipping lines had provided relief in neighboring India and several other countries, but they were reluctant to facilitate traders/importers in Pakistan.
Meanwhile, Karachi Chamber of Commerce & Industry (KCCI) has expressed its dismay and concern at the helplessness of the importers and exporters who were being exploited by shipping lines charging hefty amounts of container detention charges and penalties from consignees.
Due to the long period of lockdown and closure of industries as well as transport, importers were unable to obtain clearance from Customs and take delivery of their imported cargo well beyond the allowed free time.
Consequently, the agents of shipping lines are recovering penal charges ranging from $150 to $250/container a day, in addition to other charges and penalties at their discretion. Moreover in total disregard of the foreign exchange regulations, the conversion rate of Rupee to Dollar is taken as Rs.167 to Rs.168 during April and early May 2020 against the official rate of Rs.159 to Rs.161 to a dollar.
“Ministry of Maritime Affairs has hardly paid any attention in the last two years of present government to regulate the activities of shipping lines and their agents,” a statement issued by KCCI said.
Importers and clearing agents are forced to pay these discretionary charges without contest because the delay of each single day increases the cost of imported cargo and there have been instances where detention charges have accumulated to a level where the entire value of cargo was wiped out and customs authorities had to auction the cargo to recover their dues.
Miseries of importers and industries who import raw materials, were compounded by heavy demurrage incurred on these consignments which is payable to private terminal operators. They have strongly resisted the orders by Ministry of Maritime Affairs and KPT to give any concession to importers.
“It seems the Ports of Karachi and Port Qasim have been taken over by foreign shipping lines and foreign based terminal operators. Pakistan’s foreign trade and local industry are held hostage by these shipping lines, agents and terminal operators, resulting in higher cost of doing business. No other port authorities and ministries of shipping in the region including those in India, allow such kind of free hand to the shipping lines or terminal operators to blackmail importers and exporters at their whims,” KCCI statement said.
KCCI has time and again emphasized that shipping lines and private terminal operators have made billions of rupees and repatriated it in foreign currency for last many years, but in the time of an unprecedented crisis they not only refused to help and rescue Pakistan’s trade and Industry, rather they exploited this situation inhumanly and made a windfall profit at the cost of country’s economy.
KCCI demanded legislation whereby the shipping lines were to be restrained from imposing any charges other than those specified in the Bills of Lading and restricting encashment of security deposits received from consignees.