Nagpur: Union Surface Transport and Shipping Minister Nitin Gadkari on Friday briefed media about a significant decision taken by London-based major organizations representing the global shipping and oil industry. The organizations have announced that the size of ‘High Risk Area’ for piracy in Indian Ocean has been reduced and issued new advice to merchant ship operators. This announcement will result in huge savings, say about Rs 1500 crore, for India’s EXIM trade and consumers on account of reduced insurance premium and consequently freight costs, said Gadkari.
Gadkari said, piracy off the coast of Somalia and in the Gulf of Aden / Horn of Africa (East Africa) had surged very significantly from 2008 to 2012, leading to innumerable attacks and hijackings of merchant vessels and their crew. As a part of its counter-piracy measures, the global shipping industry, represented at international confederation levels by bodies such as BIMCO, ICS, INTER-CARGO, INTER-TANKO, OCIMF etc., brought out in 2008 a document known as Best Management Practices (BMP) by, of and for the shipping industry. This was in the form of advisories and guidances for self-protection of merchant ships and their crew from piracy attacks and hijack situations while transiting in those intensely piracy prone waters, state the minister.
“These vulnerable areas were defined as High Risk Area (HRA), characterized by piracy attacks and / or hijackings. However, subsequently 2011, the industry body known as the Round Table (headquartered at London, UK), extended the HRA geographical coordinate in the Indian Ocean which came up to the west coast of India. This stretching of the HRA had the following serious implications for India: Additional War Risk Premium (AWRP), on movement of merchant ships in piracy prone areas (High Risk Area) imposed by Insurance providers on vessels carrying Indian EXIM (export-import) cargo (around 22,000 vessels call on Indian ports every year), escalated by about approximately Rs.3,600 crore per year at the peak of the piracy period in 2008 to 2012, to around Rs.1,500 crore per year post the reduction in piracy incidence since mid 2012 onwards. The shipping industry loads this extra AWRP on the freight and transmits it to consumers, as a pass-through charge. This is a huge financial burden for Indian EXIM trade and Indian consumer,” elaborated Gadkari.
The Minister further said that the international maritime traffic density came hugging the Indian coastline to avoid the said HRA related AWRP. This, in turn, led to maritime congestion jeopardizing maritime safety. In fact, this has culminated in three reported instances of maritime collisions between merchant ships and fishing vessels, leading to fatalities of 5 Indian fishermen. This has also led to proliferation of positioning of armed security guards on board merchant vessels to deter piracy attacks / hijackings. There have been cases of firing by such security guards on Indian fishing boats and their crew and a couple of Indian fishermen have lost their lives, said Gadkari.
“In view of India’s efforts, international bodies (International Chamber of Shipping and others) have now agreed to push back the HRA from 78 degrees East longitude to the 65 degrees East longitude. This shift will come into effect from 01.12.15. The said Round Table proposes to issue fresh advisories to the international shipping community. This is one of the most significant triumphs for India in the maritime sector on the global stage, in the past several years now, vindicating India’s reasoned stance and persistently persuasive soft skills in the matter. This will result in huge savings for India’s EXIM trade and consumers on account of reduced insurance premium and consequently freight costs. It will improve safety of fishermen and fishing boats, and will also improve the security along India’s coastline,” declared Gadkari.