Implementation of the Shipping (Cabotage) Regulations, 2021 (LI 2438)
Notwithstanding its advantages, a liberalised international trade regime has rendered a lot of states disadvantaged. Persons with capital opt for cheaper sources of labour and relaxed regulatory regimes.
The impact of such global cherry-picking is that persons close to natural resources are often overlooked in favour of cheap labour and resources elsewhere. Nowhere is this more evident than in the maritime sector, which is the main driver of international trade.
To address these imbalances, states often impose restrictions in the form of cabotage regulations. The Ghanaian cabotage regulations mimic general trends in other industries where specific activities or business lines are carved out and preserved exclusively for domestic players. Framed differently, the Cabotage Regulations may be likened to the local content regulations in the mining, extractive, and petroleum sectors, which ensure greater participation of locals in that sector.
Scope of Legislation
The Ghana Shipping (Cabotage) Regulations, 2021 (LI 2438), is a protectionist legislation aimed at guaranteeing maximum Ghanaian participation in the maritime sector. It applies to vessels operating within Ghana’s inland waterways.
The practice of vessels carrying out business in Ghana’s internal waters is referred to as cabotage. Regulation 47 of LI 2438 defines the range of activities that fall within the ambit of cabotage trade.
These activities include: (a) the carriage of cargo from one place to another, including the carriage of goods in relation to the exploration, exploitation, or transport of natural resources; (b) the carriage of passengers from one place to another within Ghana’s lakes and inland waterways; (c) the carriage of passengers from one place to another where such carriage is related to the transportation of natural resources; and (d) any other maritime activity or operation of a commercial nature engaged in by a vessel and the carriage of any goods or substances, whether or not of commercial value. The Regulations recognize towage services, carriage of petroleum products and supply services, and fishing as local trade and comes within the framework of the law.
Note that the Regulations do not apply to the activities of warships, naval auxiliaries, or other government-owned vessels operated for non-commercial purposes.
Registration Requirement
A master, owner, operator, or agent of a vessel that deploys a vessel to engage in local trade must first register with the Ghana Maritime Authority. The requirement to register applies to: (a) passenger vessels; (b) crew boats; (c) bunker vessels; (d) fishing vessels; (e) barges; (f) floating storage units; (g) offshore support vessels; (h) tugs; (i) production standby vessels; (j) diving support vessels; (k) tankers; (l) dredgers; and (m) any other craft or vessel.
Vessels flying the Ghanaian flag must register with the Ghana Maritime Authority to operate in Ghana’s inland waters. Similar registration requirements apply to foreign vessels.
Masters, owners, operators, and agents of foreign vessels (i.e., vessels not flying the Ghanaian flag or not registered in Ghana) may apply in writing to the Director-General of the Ghana Maritime Authority for a Cabotage Registration Certificate.
The foreign applicant must provide basic information such as the name of the ship, registry of the ship, port of registry, international maritime organization number, gross tonnage, name of the registered owner, address of the registered owner, and a description of the nature of the intended service or activity in Ghana. Once granted, the Cabotage Registration Certificate is valid for 12 months.
A Cabotage Registration Certificate may be cancelled on the grounds of providing false information to the Registrar and non-compliance with the regulations.
Further, the Regulations prohibit a person not qualified to own a Ghanaian vessel under the Ghana Shipping Act from chartering or entering into an agreement with a Ghanaian citizen or company to use a Ghanaian vessel for local trade in Ghana’s maritime jurisdiction.
Engagement of Vessels in Local Trade
Vessels intending to operate in Ghana’s internal waters must meet several conditions.
The first condition is that the vessel must be registered in Ghana, must be owned by a citizen or Ghanaian company, or represented by an indigenous Ghanaian company as an agent.
Secondly, 75 percent of the ship’s ratings (i.e., non-officers) must be Ghanaian. The ship’s ratings include: (a) able seamen; (b) ordinary seamen; (c) motor men; (d) fitters/welders; and (e) cooks and stewards. Also, fifty percent of the ship’s officers must be Ghanaian, and at least half of this percentage (i.e., 25 percent) must operate at a senior operational level.
That said, the Regulations make exemptions for the use of foreign workers where there is no qualified Ghanaian or rating to occupy the designated position.
Exemptions for Special Purpose Vessels
The Regulations allow foreign-registered vessels designed to carry out specialized tasks to do business in Ghana. Examples of these Special Purpose Vessels include: (a) vessels designed to engage in emergency cleaning activity related to marine pollution or a threatened pollution risk; (b) vessels designed to engage in ocean research activity commissioned by the Ministry responsible for Fisheries or any other government agency; (c) vessels with the capability to conduct marine scientific research; and (d) vessels with the capability to carry out emergency repairs on subsea telecommunication cables and pipelines that have been damaged.
Similar exemptions apply in the case of foreign-registered salvage vessels.
Enforcement
The Regulations provide for an enforcement officer with the power to stop and board a vessel to conduct a search on the vessel and seize anything found in or on the vessel. The enforcement officer may require (a) the production of documents proving contravention; (b) the master of the vessel to give information relating to the vessel, cargo, stores, crew, passengers, or voyage; (c) the master or person found on board the vessel to give all reasonable assistance in the power of the master or other person to enable the enforcement officer to carry out his duties; and (d) request assistance from the Customs Division of the Ghana Revenue Authority, the marine police, the Ghana Ports and Harbour Authority, and any other law enforcement agency as the enforcement officer considers necessary.
Infringing vessels may be detained.
Dispute Resolution
The Regulations establish a Cabotage Dispute Committee to resolve disputes that arise from vessels engaging in local trade. This includes disputes arising from the carriage of passengers or cargo from one place to another. Persons dissatisfied with the decision of the Cabotage Dispute Committee may appeal to the Minister for the resolution of disputes. If the outcome of the Minister’s intervention is not satisfactory, the dissatisfied party may appeal further to the High Court.
Implementation date
The start date for the implementation of the Ghana Shipping (Cabotage) Regulations, 2021, is 1st August 2024.
Conclusion
While the United Nations Convention on the Law of the Sea (UNCLOS) regulates shipping activities on the High Sea, the Exclusive Economic Zone, and to some extent, the Contiguous zones, it does not apply to a country’s internal waters. Therefore, states are at liberty to pass laws to regulate the use of their internal waters. An example of such legislation is the Ghana Shipping (Cabotage) Regulations, 2021 (LI 2438).
The Ghana Shipping (Cabotage) Regulations, 2021 (LI 2438) is designed and structured to ensure maximum participation for Ghanaians. The expectation is that the participation will translate into more employment opportunities and facilitate skills transfer at various levels within the ship manning enterprises. It bears mentioning that the cabotage regulations are not very strict and allow for some flexibilities. Key among these flexibilities is the provision being made for the employment and use of persons whose skill sets are not readily available on the Ghanaian market. Further, foreign specialized vessels not available in the Ghanaian maritime industry may also be deployed for use in Ghana’s internal waters.
Author
samuel@audreygrey.co
info@audreygrey.co
Samuel is a Partner
AudreyGrey
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AudreyGrey is a corporate law firm with a focus on Corporate Law, Taxation and Insolvency. We also have a specialization in Maritime law.
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