WSC urges govt to review some requirements, practices of law

The World Shipping Council (WSC) has expressed serious concerns about the operation and implementation of the Bangladesh Flag Vessel (Protection of Interest) Rule of 2023 ("2023 Rule").
Bangladesh has recently adopted the rule pursuant to the Bangladesh Flag Vessel (Protection of Interest) Act of 2019 ("2019 Law").
The non-profit international trade association on May 04 issued a letter to the Ministry of Shipping of Bangladesh and the parties concerned, urging the government to reconsider some of the requirements and practices under the 2023 Rule.
"We respectfully urge your good offices to reassess the waiver process under the 2023 Rule and endeavor to find a solution more in line with the previous waiver process that is consistent with fair competition, and free market principles of international trade," reads the letter, a copy of which was obtained by the FE.
The WSC represents the international liner shipping industry on important trade and policy matters in Asia, Europe, and the United States, and has 20 ocean carrier members representing approximately 90% of global liner vessel capacity.
A number of its members provide liner services to and from Bangladesh, and that the adoption and implementation of the 2023 Rule has already led to a number of problems, including reduced overall competition for shipping services to and from Bangladesh, delays, congestion, and other operational disruptions at Bangladesh ports, and higher shipping costs.
The WSC said its members have invested hundreds of billions of dollars in ships, port terminals, and related infrastructure to ensure that a wide variety of options continue to exist for safe, dependable, and economical international ocean transportation of cargo.
Furthermore, the WSC argued that these consequences have a substantial negative impact on Bangladesh importers and exporters, and ultimately the national economy, which relies heavily on foreign trade.
The WSC also expressed concerns about the waiver process under the 2023 Rule, and urged the government to find a solution that is more in line with the previous waiver process that is consistent with fair competition and free market principles of international trade.
The 2019 Law requires that "at least fifty per cent of the sea-borne cargoes relating to the foreign trade of Bangladesh shall, subject to the other provisions of this Act, be carried by Bangladesh flag vessels."
However, the Law also provides that this requirement shall not apply to "any cargo in respect of which a certificate of waiver is issued by the Prescribed Authority," and "any cargo in respect of which a general waiver is announced by the Prescribed Authority."
The Bangladesh Ocean Going Ship Owners Association (BOGSOA), a trade body of the owners of Bangladesh-flagged vessels, pointed out that there are a number of problems with this waiver process, which have led to market distortions and operational challenges.
The 2019 Law does not require obtaining an opinion from the Bangladesh Shipping Corporation or the BOGSOA in order to obtain a waiver. In practice, however, obtaining such an opinion effectively requires obtaining these entities' consent.
The WSC argued that granting such authority to private entities can result in decisions being made in the commercial interests of those few entities, as opposed to the public's interest and the neutral balancing of the protection of Bangladesh-flagged carriers with the Government's broader interests in protecting its importers and exporters, its foreign trade, and its overall economy.
The Bangladesh economy relies heavily on the export of consumer goods, including clothing, and its domestic industries rely on the import of raw materials and other products.
The Department of Shipping should therefore reconsider the appropriateness of delegating such an important national policy to private parties, reads the letter, signed by Kenneth Chia, Managing Director, Asia of the WSC.

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