This is an extract from the SA government's White Paper on National Transport Policy which was prepared in August 1996 pursuant to the transport policy review initative of the Minister of Transport, Mr Mac Maharaj. The Minister appointed Working Groups to review all aspects of transport policy, upon the recommendations of which two plenary report-back sessions were held to invite discussion from transport stakeholders.

The White Paper was approved by Cabinet in September 1997.

White Paper on National Transport Policy

Department of Transport, Pretoria

20 August 1996

[As approved by Cabinet September 1996]

Website Note: This is an extract from the SA government's White Paper on National Transport Policy. The extract should be read in the context of the full White Paper, and particularly its general comments on policy and formutation.

MARITIME TRANSPORT

Maritime transport encompasses all forms of transport by sea, intermodal links and inland ports but has certain fundamental differences from other modes of transport. First, it caters almost entirely for the freight market, and offers no significant passenger carrying ability. Second, as it operates in an international environment, it is subject to considerable competition and economic pressure from foreign competitors.

This policy review addresses maritime transport issues relating to economic principles, trades and cargoes, ship financing and registration, the operation of ships, ports, safety at sea, employment & training, and administration.

Mission

The mission of maritime transport policy is:

"To encourage and support the SA maritime transport industry in a manner which underpins the four fundamental objectives of the RDP, gives effect to the overall vision of transport and in so doing which:

Develops a maritime awareness in South Africa;

assists in the creation and fostering of an economic environment for the Maritime Transport Industry which will allow it to compete on at least an equal basis with the maritime carriers of other nations and South African land-based carriers;

ensures safety of life and property at sea and the prevention of pollution of the sea by ships;

ensures fair labour practices such as, employee rights, job creation and security with acceptable standards of employee health, welfare and safety in the maritime industry; and

contributes to the release of the full potential of the maritime industry in South Africa and to the modernisation of shipping administration in South Africa".

Strategic objectives

The strategic objectives of maritime transport policy are:

To facilitate and enhance the expansion of international trade and tourism in general, and exports in particular

To ensure that economic decisions are, as far as possible, left to market forces, subject to general competitive principles applicable to all industries, with the view to maximising consumer choice, need satisfaction and job creation

To promote the development of an efficient and productive South African maritime industry capable of competing on international markets

To maintain control over maritime services within a well defined regulatory framework that is flexible enough to cater for changing needs and circumstances and to ensure orderly, safe and reliable maritime transport services

To promote international relations with other countries and international organisations involved in maritime activities.

To ensure cost effective and efficient shipping operation.

POLICY STATEMENTS

Economic principles

Policy

Maritime transport policy should attempt to foster and maintain a competitive climate wherever appropriate and the Government will avoid protectionist maritime practices and maintain an "open ports" policy.

Government recognises the South African shipping industry as a fully-fledged exporter of services whose activities considerably strengthen the South African balance of payments.

Government recognises the strategic importance of the South African shipping industry and the external benefits it bestows on the wider economy.

Trades and cargoes

Issue

Without trade there can be no cargo. Without cargo there cannot be a healthy shipping industry. Shipping is essential for the promotion and preservation of fixed trade links between trading nations.

Terms of trade exercise considerable influence over the benefit the country receives from the maritime industry. Buying Free on Board (FOB) and selling Cost, Insurance, and Freight (CIF) allows the trader to nominate the carrier. While South African cargo interests are encouraged to nominate South African carriers to carry their cargo, any attempt to statutorily stipulate terms of trade would constitute an unwarranted interference in trade.

Policy

Government is committed to the promotion and continued development of regular shipping services (and related infrastructural requirements) between South Africa and its major trading partners within a well-defined regulatory framework.

Commercial decisions will as far as possible be left to market forces to be resolved and accordingly, subject to general economic principles applicable to all industries, cargo interests should be free from interference in freight negotiations.

Government will promote an interdepartmental initiative to educate exporters of SA goods on the advantages of shipping their cargoes on SA vessels or on CIF terms. This process should be an on-going and pro-active educational, support and public relations exercise and should apply equally to importers buying FOB.

Ship financing , registration and the Fiscus

Issue

South Africa needs a modern ship's register which is efficient, which balances the interests of the nation, shipowners and seafarers in an internationally acceptable manner, and which accords with principles of international law relating to the necessity of a "genuine link" between the state of registry and the shipowner. The register should be attractive to both local and foreign investors, but in no way a "flag of convenience".

Policy

Government will promote interdepartmental and private initiatives to ensure that administrative, fiscal and legal inhibitors to the development of the SA register and its ancillary services are removed.

Fiscal aspects affecting shipping will be reappraised on an interdepartmental basis with a view to initiating change where appropriate. These aspects include income tax paid by seamen, shipowners and operators, exchange controls, and duties, and a review of the ranking of claims under the Admiralty Jurisdiction Regulation Act in line with international practice and conventions..

The operation of ships

Issue

South African shipowners do not enjoy the same competitive advantages as many foreign carriers.

Both local and foreign owned vessels on the international trades to and from South Africa are free to carry South African coastal cargo, but those on international trades have the advantages of fuel at the international price, of seafarers being exempt from income tax, of no import duties payable on ship's spares, and, in the case of many, of operation in low or no income tax regimes.

The industry has an enforced reliance on monopolistic supply of port services by Portnet. This adversely affects the competitive position of coastal carriage especially.

Policy

The disincentives facing coastal shipping in relation to other transport modes and foreign competition will be addressed at an interdepartmental level and removed where appropriate.

Cabotage options will be monitored in the light of changing international cabotage practices and attitudes. The introduction of cabotage protection legislation on an African continental or Southern African regional basis will be investigated.

South Africa will strive to increase its share of liner shipping, and will monitor its options in relation to the UNCTAD Code in the future.

In order to promote the growth of South African shipping interests in the dry bulk sector, research will be undertaken to establish how other nations have successfully increased their market share in the shipment of bulk products and to seek acceptable ways of emulating this.

The scope for bilateral shipping agreements which will enable South African shipping interests to access markets which are currently inaccessible will be explored.

Bilateral shipping or taxation agreements will be negotiated with countries which levy freight taxes on non-resident shipowners so as to eliminate or reduce foreign taxes.

Safety at sea and administration

Issue

A cohesive, co-ordinated and effective policy giving due cognisance to internationally accepted principles of safety of life and property at sea as well as to particular requirements of the South African coastline and the trades which ply its waters, is a prerequisite to ensuring safe and orderly maritime transport.

There exists in international law and practice, a procedure of Port State Control (PSC) by which a state may conduct limited safety inspections of all vessels calling at its ports. PSC has demonstrably reduced the incidence of substandard ships calling at ports where it is rigorously enforced. Further measures such as mandatory ship reporting, are now legally enforceable under international law.

SA's full membership of the International Maritime Organisation, and the development of international maritime controls such as improved flag state vessel safety requirements and PSC, have however imposed greatly increased obligations and burdens on the Chief Directorate: Shipping. The department is inadequately staffed to cope with this burden.

There is an unsatisfactory overlap of departmental jurisdictions relating to oil pollution at sea and to the investigation of maritime casualties.

Many SA maritime regulations are outdated and require updating or repeal. Most require re-examination in the light of the Constitution of the RSA. There are many international conventions which require examination to assess the advisability of SA acceding to them.

The provision of a satisfactory well-prepared and well-equipped salvage service and marine pollution reaction service for the South African coastline is strategically necessary, and cannot be left to be funded entirely by the private sector.

Policy

Government will improve the performance of Port State Control as an effective means of deterring substandard ships and their owners from calling at SA ports.

The resources of the Chief Directorate: Shipping will be increased to enable it to deal satisfactorily with all maritime matters, including PSC and the revision of legislation, to which end attention will be given to the creation of a Maritime Safety Authority as an option.

Government will consider the creation of a statutory National Navigation Authority under the auspices of the Department of Transport.

Although Government participation in salvage, directly or indirectly will be discouraged as being a disincentive to the investment of the private sector in the industry, the State will stimulate investment from the private sector in the tug and salvage industry.

Port operations and administration

Issue

Ports play a crucial and strategic role in the facilitation of seaborne trade. Ports are strategic assets serving the nation as a whole. The real estate of South African ports is currently owned by Transnet Limited. The port authority function is delegated to Portnet, an operating arm of Transnet, and services within the ports are provided either by Portnet or by private enterprise. At present, Portnet provides the majority of services. There is at present no external port regulatory and monitoring authority. Portnet (through Transnet) enjoys a natural and legally structured monopoly and acts also as its own regulator. Within its quasi-government though legal corporate structure, Portnet also operates in direct competition with private operators offering various services within SA ports.

The vagaries of international shipping, the profound changes flowing from the displacement of breakbulk cargoes by containerisation, and trade sanctions, have left a legacy in SA's ports characterised by a predominance of casual dock labour over an ever dwindling permanent dock labour force. Any re-structuring of ownership or operation of SA ports will need to take the interests of organised and unorganised dock labour into account.

Policy

A port authority (or authorities) with specific responsibilities for the maintenance and development of port infrastructure will be established.

Although the intention is that an independent port authority (or authorities) be established at national level, there is no reason why a port authority should not be devolved to provincial or metropolitan levels.

The port authority will have the function of administering the port infrastructures, ensuring the long-term development of the ports to meet the needs of the economy, regulating the operations in the ports by controlling tariffs and service standards where this is necessary in a monopolistic situation, and providing, on a cost recovery basis, essential port services not willingly taken on by private enterprise.

Since it will itself be a monopoly, the port authority will be regulated by an independent regulator.

The port authority will be independent of any port operating entity (or entities).

In order to promote low costs, high level of service, and shipper choice in the port operations, a competitive environment will be created by enabling private enterprise to offer port services.

All stakeholders, including all levels of government, will be consulted in the planning of ports.

Employment

Issue

SA seafarers are currently not given the same protections and rights in labour law as workers employed on land.

The SA shipping industry is currently experiencing a shortage of skilled and adequately certificated SA seafarers, particularly in the deck and engine room officer ranks. This problem is exacerbated by the presently fragmented approach to training and development, and the declining resources available to institutions.

Economic liberalisation in the ports, coupled with the vagaries of shipping and cargo movements and consequent sharply variable labour requirements have in the last twenty years led to wage competition particularly in stevedoring and other parts of the cargo handling industry. This has in turn led to the replacement of permanently employed dockers by casual workers.

The majority of workers in port cargo-handling operations are unskilled with a high level of illiteracy, thereby limiting their ability and the industry to adapt to technological change and improve efficiency and levels of service.

Policy

The Department of Transport will liaise with other Departments of Government to promote:

The amendment of labour legislation to ensure that seafarers employed by SA owners and operators are afforded the same rights and protections as other workers,

Correct management of any restructuring of employment in ports,

Involvement of labour in all developments affecting employment, and

The re-structuring of employment to ensure that the variable labour requirement of port service providers are sourced from a common pool at equal unit cost in order to reverse the casualisation of port employment and to improve working conditions and efficiency of service.

The crisis of skills and basic education in the maritime labour market will be urgently addressed through a concerted programme of education and training to meet the growing demand for seafarers, and to improve the skills base of existing employees in the industry.

Education and training must comply with domestic and international standards as defined and required in the SA Qualifications Authority Act and the STCW convention. Whilst Government, through the DoT will continue to act as the competent authority administering the certification of seafarers in terms of the STCW, Government will also work with and support the Maritime Industry Training Board in its functions:

as the competent standard setting and accreditation body for training and education in the maritime industry, other than seafarers, under the SAQA Act;

as a facilitator of education and training to ensure that the training and education needs of employees and the industry are met; and

as a sponsor of maritime training and education.

Government will also assist the MITB in its efforts to arrive at appropriate and effective financing mechanisms which require minimum wastage of resources on administration and enforcement.