Inside Africa blog

Legal developments around Africa

The changing face of South Africa’s shipping legislation

Malcolm Hartwell
September 07, 2016

Posted in Transport Southern Africa

The government is about to launch an ambitious and extensive overhaul of South Africa’s shipping legislation to align it with modern practices and with the laws of the country’s major trading partners. This will impact companies operating in the shipping and maritime sectors who will need to ensure compliance as well as an awareness of possible opportunities. Stung by countrywide service delivery protests and inspired by the African Union’s 2050 African Maritime Charter, the ruling party launched Operation Phakisa in August 2014.  The program, modelled on the Malaysian big project, quick delivery approach to development, was designed to exploit the economic opportunities of the long coastline and extensive maritime areas, has been endorsed by cabinet and launched by the government.  From a shipping perspective, the major areas affected are:

  • A long overdue redraft of the Merchant Shipping Act
  • Probable adoption of the Nairobi Wreck Removal Convention to incorporate it into domestic legislation
  • Possible adoption and incorporation of the Rotterdam Rules to replace the Hague-Visby Rules currently incorporated into the South African Carriage of Goods by Sea Act
  • The drafting of pollution regulations and alignment of related legislation with the latest Conventions South Africa has adopted.

The Merchant Shipping Act and its myriad of associated regulations has been around for some 60 years and is woefully out of date. This has been largely unnoticed because South Africa has so few ships on its national registry. An update of the Act will no doubt bring comfort to ship-owners who are considering flagging their vessels in South Africa.

The adoption of the Nairobi Convention and its incorporation into domestic legislation will serve to modernise the wreck and salvage regime and cure a number of anomalies that exist in the current Wreck and Salvage Act.   Compulsory wreck removal insurance for vessels entering South African waters and claimants’ rights of direct recourse against the insurers of a ship will be required.  Taxpayers will benefit from no longer having to foot wreck removal costs incurred by national, provincial and local government where the owners of the wreck simply abandon it and the insurers withdraw cover. This would have assisted in recovering the costs of dealing with the grounding of the mt Phoenix off Ballito, and the loss of the mv Seli I off Cape Town, for instance.

Most maritime nations apply a version of the 1924 Hague or 1968 Hague-Visby Rules to the carriage of cargoes to and from their countries. Several attempts have been made to update those regimes.  Carriage regimes constitute a compromise between the interests of two principal parties: the owners of the ships carrying the cargo and owners of the cargo being carried in the ships.  Risks are allocated between the two parties and are subsequently insured. 

The Rotterdam Rules mark the latest in this line of compromises.  Their success will depend on whether they are adopted by the world’s major trading nations led by the US, China and the EU. If South Africa’s major trading partners accede to and incorporate the Rotterdam Rules then South Africa will likely follow, marking a significant change to the Hague-Visby-based carriage and limitation regime.

In the last year significant progress has been made in acceding to most modern pollution conventions.  South African victims of crude oil pollution are now able to claim directly from a global insurance fund.  The country’s pollution legislation is, however, contained in a number of separate laws which are not consistent with the international conventions to which it is a party. South Africa’s domestic legislation therefore needs to be aligned with its international obligations.

A significant feature of this programme is not only  its potential for sweeping changes but also the tight timeframe. Many of the changes are scheduled to take place by the end of 2016 which means that companies trading in these sectors need to educate themselves about the changing legislative face of South African shipping.

About

Africa is as dynamic a market as it is diverse. We understand that changes impacting your business can arise rapidly and vary significantly across the continent.

Our understanding of Africa’s markets stems from extensive experience on the ground. Through our Inside Africa blog, we aim to apply this insight to provide you with timely commentary on the latest developments across Africa, as well as insight into the many nations that make up this vast continent.

Read more
Blog Network

Topics

Archives