Member Article

In recent months, the South African Minister of Transport gave notice that Cabinet had approved the Comprehensive Maritime Transport Policy, 2017 (“CMTP”). The CMTP makes certain policy statements in order to develop South Africa’s maritime industry. Below, we summarise certain policy statements that relate to the more commercial aspects of shipping, in the order in which they are dealt with in the CMTP. The CMTP aims to:

1. Establish, in consultation with relevant organs of state and stakeholders, a coherent and integrated strategy in the maritime transport sector, including the creation of a formalised maritime transport platform within government and a Maritime Transport Sector Development Council to establish a multi-year Maritime Transport Sector Development Plan.
2. Ensure that the Department of Transport has an appropriately configured maritime structure populated with highly skilled, competent and innovative officials and that agencies reporting to the department are well-managed centres of excellence.
3. Develop, by way of a Maritime Transport Sector Development Plan, an aggressive strategy to ensure the growth of the sector, including:

• The establishment of a national shipping carrier and the implementation of measures that will ensure that within the next five years, a significant targeted percentage of imports to and exports from South Africa are moved by that national shipping carrier;
• the expansion and adoption of a revised Maritime Services Broad-Based Black Economic Empowerment Charter to include shipping, offshore industries and the provision of maritime security services.

4. Review the 2002 Commercial Ports Policy to include a port land use spatial planning framework. This also includes the introduction of monitoring and evaluating instruments for private sector participants in commercial ports with continued monitoring of the competitiveness of the South African port system and the introduction of measures to ensure broadened participation of domestic entities in port operations.
5. Encourage and support the growth and development of the marine manufacturing and related services sub-sector through legislation and long leases from the Ports Authority and to develop a framework for bunkering infrastructure for the exploration and exploitation of offshore marine assets.
6. Ensure that the maritime transport sector is treated as a part of the freight logistics system so as to effectively tackle bottlenecks in the system.
7. Formulate and implement a Small Harbours Development Policy and regulatory framework and explore their role in the development of coastal shipping.
8. Develop a cabotage regulatory framework, inclusive of licensing, restrictions and enforcement functions as well as a roadmap for implementation in the coastal shipping market. Cabotage is defined as trade transit of a vessel along the coast (cabotage trading) from one port to another within the territorial limits of a single nation. 

Coastal shipping is broadly defined as including:

• Any navigation service provided to a ship or port facility in a port or the sea in South Africa; 
• The carriage of cargo by ship from one place in South Africa to another, but excludes transshipment cargo under a through bill; 
• The towage of any ship from one point, presumably in South Africa, to any other point, presumably within South Africa; 
• The carriage of any fee-paying passenger from any place in South Africa to another via a port call outside of South Africa;
• The carriage of any passenger, other than a fee-paying passenger, from any place in the South Africa to any place above or
• Under the sea in relation to off-shore activity; 
• Any ocean research activity using a ship; and 
• Any service provided to an installation by a ship.

The envisaged restrictions will be to promote South African ship ownership with appropriate incentives being put in place and preferential treatment being given to the national shipping carrier. Furthermore, cabotage and coastal shipping will be reserved exclusively to South African vessels and South African seafarers.

9. Introduce measures to encourage the carriage of commodities by South African vessels ,to include but not be limited to, percentage targets, and to set and implement the criteria for the designation of a national shipping carrier.
10. Explore financing mechanisms and fiscal incentives to attract ships to the South African ship register and promote black shipping industrialists, including the feasibility of establishing a national ship finance corporation of South Africa, exploring with the banking sector ways of overcoming obstacles to raising capital, and the introduction of financing and incentives for locally built vessels. As part of such a policy, a competitive mortgage and insurance regime will be developed which gives preference to a mortgagee’s claim over that of a necessaries man and the associated ship arrest provisions will be reviewed.

There are a further twenty-seven policy statements that deal with important issues of less commercial relevance. The full CMTP policy document can be accessed here.

Given the critical importance of keeping transport costs to a minimum in order to sustain global trading competitiveness, it will be necessary for government to ensure that ships that are brought to the South African register are afforded a regulatory environment that is just as cost-effective and as efficient as any other in the world. Obliging carriers to register in an environment that is less cost effective and efficient by way of cargo reservations, will simply serve to increase commodity trading costs, reduce commodity trading competitiveness and thereby, negatively impact the economy. The CMTP goes some way to set out how a competitive regulatory environment will be achieved. It will, however, be necessary for there to be ongoing consultation between government and the private sector in this regard to ensure that this is achieved.