The New Shipbuilding Policy: A new future ahead

As a riverine country, Bangladesh has a long history of shipbuilding. Chattogram which is known as the port city of Bangladesh, has been involved in building of ships since the Mughal empire and with the flow of time, the tradition continues. The modern era of shipbuilding started in the 1960s during the Pakistan regime. However, international contracts were awarded to Bangladeshi shipbuilders from 2008. With over a hundred shipyards, Bangladesh has taken lead in shipbreaking and the process of shipbuilding has also accelerated in course of time. With the plan of 2041 to make Bangladesh a developed country, the government is emphasising on shipping and business related to shipping to achieve the goal. Over the last ten years, the Bangladesh government has taken several steps such as enacting the law and making rules to improve the sector.

After Bangladesh Environmental Lawyers Association (BELA) filed a writ petition in 2008 seeking to ban the entry of the hazardous vessels listed by Greenpeace into the Bangladesh territorial water and frame necessary rules concerning the matter, the government passed the Ship Breaking and Recycling Rules 2011. The Rules were made taking into consideration several legislations and international instruments, namely the Bangladesh Labour Act, 2006; ILO Guidelines for safety and health in shipbreaking activities; the Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships, 2009; and Basel Convention, 1989. The Rules was in force till 2018. Further to boost the shipping industry, the Parliament passed the Ship Recycling Act, 2018. The Act contained provisions requiring the adoption of environment-friendly methods for ship recycling. The Act relied on the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 as a model of international standard. The Act gave the power to formulate a Board. The purpose of the Board is to oversee and make reports concerning the ship recycling process, ensuring labor healthcare, taking safety measures, suggesting the government for the improvement of ship recycling industry, research and connection with national and international agencies on concerned matters.

The Act has vested the inspection in the authorised person approved by the Board. Five chapters are dedicated to environmental protection and labour health safety. Under one of the chapters, the government is to establish Treatment Storage and Disposal Facility (TSDF) to disperse the waste from the shipyards. The chapter additionally addresses the labour training facilities, maintaining a database for the workers, compulsory insurance, compensation for any injury, death. Moreover, the Act prescribed criminal proceedings and penalties for the violation of the provisions. It is noted that the existing laws do not address the issues of the environment or hazardous material or gas emissions from the vessels. Therefore, the government has taken steps to improve the shipping policy for a better future.

As per reports published by the Ministry of Industry of Bangladesh in 2021, the Norwegian government assured continued assistance from their government in the field of shipbuilding and ship recycling industry of Bangladesh. In a virtual meeting, the Norwegian Ambassador mentioned that the future bilateral relationship between two countries in terms of training skilled workers in shipbuilding and ship recycling industry, assistance to make environment-friendly, greener shipping industry and post-pandemic aid.

To develop the shipbuilding industry, the Shipbuilding Industry Development Policy, 2020 has been drafted. The government of Bangladesh targets a growth of USD 4 billion by 2026 in this sector.

The government is emphasising on developing private investment and entrepreneurship in shipping industry. In view of the same, the policy proposes to ease by reducing bank interest to 4% per annum. Additionally, a low-cost bank guarantee, performance guarantee and letter of credit have also been proposed.

Moreover, to have and maintain the international standard, the government is planning to make the Bangladesh Ship Classification Society. Another objective of the policy is to produce Tankers, Carriers, and Mining Vessels for Bangladesh. The draft of the policy has proposed to have a 5000 crore BDT fund regarding shipbuilding.

The proposed policy aims at environmental protection and makes provisions to prevent the emissions from greenhouse gases and carbon emissions. The government also focuses on technologies.

Moreover, the draft policy has thirteen actions planned to be implemented between 2021 and 2026. The plans are related to export development, making bilateral, multilateral agreements, maintaining international standards product quality, loan facilities, withdrawal of imposed duty as well as tax holiday of ten years, suing ultra-modern technology, research, education, training to adopt the new mechanism of shipbuilding.

In addition, with direct ship financing, the government would also promote bunkers services and strengthening the capital market. Another aspect of the shipping industry is male domination. However, the government inserted the provisions to empower women and to give facilities for women entrepreneurship.

After the aforesaid discussions, even though shipbuilding is hundreds of years old in Bangladesh, the country is still behind in creating international-level vessels.

To elevate the shipbuilding industry, the government needa new Act, Rules, Policies to enhance the shipbuilding sectors. The recent steps of the government are contemporary are taken for the betterment of the shipbuilding industry. Bangladesh government has taken the Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships, 2009 as a model to make its new policies for the industry.

Moreover, though the government took the initiative for research, education, and training concerning shipbuilding, a dedicated technical group separated from the board may be beneficial. Furthermore, the policy provided ADR mechanism. However, Bangladesh has yet to see a separate specialised Tribunal for maritime sector as it will expedite the adjudication of the disputed matters.

Hence, a proper specialized tribunal would be beneficial for the shipping industry in order to adjudicate the disputed matters promptly and provide relief to the parties involved.

THE WRITERS ARE LAWYERS OF MCLAW SERVICES, BEING THE HEAD OF THE CHAMBERS AND APPRENTICE LAWYER OF MCLAW SERVICES RESPECTIVELY.