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Waiver certificates for foreign feeder vessels

BGMEA decries issuance delay

SYFUL ISLAM | November 21, 2023 00:00:00

Amid disruptions to foreign trade by delays in issuing waiver certificates to feeder vessels, the country's apparel makers have urged the authorities concerned to resolve the complexities in greater good of businesses.

Foreign feeder vessels carry over 90 per cent of seaborne trade to and from Chittagong port, as well as regional transhipment ports.

However, the Bangladesh Flag Vessel (Protection) Act 2019 and subsequent rules mandate that foreign feeder vessels obtain a waiver certificate from the Mercantile Marine Department (MMD) before loading cargo at any port where a Bangladeshi flag vessel is present.

This provision of the act has allegedly created severe uncertainty for foreign feeder vessels, who claim that the MMD makes excessive delays in issuing waiver certificates, putting their businesses in a quandary.

Local agents of the feeder vessels must submit an online application for a waiver certificate 15 days before a scheduled trip. Despite submitting the application well in advance, they reportedly do not receive the waiver certificate on time, leading to constant uncertainty about their next trip.

Last week, the MMD penalised two foreign feeder vessels -- each with a fine of Tk 500,000 -- for allegedly loading containers without obtaining a waiver certificate and completing voyages. The punishment was strongly protested by the local shipping agents.

The row over waiver certificates between the MMD and foreign feeder vessels has also created difficulties for the garment industry in importing raw materials and making outbound shipments.

In light of these developments, Hasan Abdullah, chairman of the Standing Committee on Port and Shipping at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), expressed strong disappointment in a letter addressed to the Department of Shipping on Sunday.

He said that the "procedural rigmarole" for issuing waiver certificates has had a serious impact on the garment trade.

"In no uncertain terms, we would like to state that this is apt to cause massive disruption and affect the export of readymade garments and the import of related raw materials, all the more so in view of the severe downturn in global markets," he wrote.

Referring to a previous letter sent to the Ministry of Shipping, Mr Abdullah wrote that in the carriage of goods by sea, universally the freight component is far too insignificant compared to the value and trade implications of the cargo carried on board.

"Therefore, to ensure or secure freightage for Bangladesh flag vessels through the promulgation of an act/statute, it is of paramount importance that this is not done at the cost of trade and/or endangering the smooth flow of international trade with Bangladesh," he noted.

"There will be severe impediments in the movement of our garment exports if foreign flag feeder operators are flushed out under this act or if they withdraw their coverage to Bangladesh," he warned.

Mr Abdullah further said that keeping foreign flag ships waiting unnecessarily due to delays in issuing waiver certificates effectively prevents them from executing scheduled commercial ventures, leading to waiting costs, port charges and other daily operational costs.

"This is absolutely not commensurate with the core economics of the shipping industry. No ship-owner/operator can afford to oblige and as a result, our member industries will sustain serious difficulties and even order cancellations," he noted.

The BGMEA believes that since no Bangladesh flag vessel operates to transport containerised cargoes directly between Bangladesh and its trading partner countries, the authority should permit the carriage of containerised cargoes to or from Bangladesh by a third-country flag vessel as per the provision of section 4 of the act on filing of an application.

Mr Abdullah called upon the Department of Shipping to review its submissions "to avert any interruption to the free flow of trade and supply chain issues".

"Shipping thrives on trade and there is no scope for the reverse situation in Bangladesh," he said, adding, "Creating any bottleneck/impediments to the garment industry's interests, directly or indirectly, will affect the country's major foreign exchange earnings..."

"...the responsibility for such an eventuality will fall on the shoulders of those who ignore this cautionary note from BGMEA," he concluded.

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