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8/8/2019 JAMES PROJECT1

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James Steven Cutinho


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Abstract

1. Background

1.1 The world situation1.2 The Indian situation

1.3 Shortage: Which grade and How much

1.4 Seafaring and the maritime sector

1.5 The key issues

2. Approaches taken to redress the skills shortage

2.1 The International Maritime Organization

2.2 Norway: shore-based maritime career path

2.3 United Kingdom: SMarT scheme and tonnage tax obligations

2.4 Germany: wages costs reduction measures and tonnage taxobligations

2.5 Republic of Ireland: training and trainee support

2.6 Hong Kong: trainee support

3. Summary of solutions

3.1 Solutions for shortage caused by lack of training berths

3.2 Solutions for shortage caused by costs imposed on employers

3.3 Solutions for shortage caused by lack of local entrants to seafaring

3.4 Solutions for shortage caused by poor retention rates of trainedseafarers

3.5 Themes identified by the review

4. An Indian approach

4.1 A new policy framework the last chance?

4.2 An effective solution?

5. Conclusion

Contents


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An Indian seafarer working aboard a foreign-flagged vessel earns more than double

what he would on an Indian -flagged carrier. This and the tax benefits have led to a

large-scale drift of skilled manpower to ships flying foreign flags. In dian ship owners

are concerned that unless the Government takes quick remedial steps, the sector

will soon face a crisis of shortage of qualified personnel

Seafarers skills are required not just for the operation of ships but, importantly,

also for the effective running of the broader maritime industry. Even though

some countries have taken steps to ameliorate the problem, it is predicted the

shortage of officers will continue to worsen steadily. A range of solutions has

been tried with varying degrees of success, but the question remains: which

solutions should India adopt?

Analysis of the Indian maritime skills shortage identifies two key issues needing

resolution, namely the lack of on-board training berths and the inequitable cost

burden borne by the few employers providing training which ultimately benefits

the whole industry. Examples of solutions to these two issues in particular, and

more broadly to the maritime skills shortage in India, are canvassed in this

paper.

Abstract


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1.1 THE WORLD SITUATION

The BIMCO/ISF Manpower Update provides the most comprehensive

assessment of the global supply and demand for merchant seafarers that is

currently available. The first pioneering study was conducted in 1990 and

has since been updated every 5 years. This 2010 Update has two main

purposes:

y To describe the current worldwide supply and demand situation forseafarers; and

y To make predictions about the likely position in 5-10 years time, inorder to help the industry anticipate developments and take

appropriate action.

The 2010 Update

The 2010 Update is based on data collected from questionnaires sent to

governments, shipping companies and crewing experts. It also incorporates

the views and perceptions of senior executives in shipping companies and

maritime administrations, and detailed statistical analysis provided by the

Warwick Institute for Employment Research. Importantly, for the first time,

the study has been assisted by Dalian Maritime University which has helped

obtain input from Asian countries where it had previously been difficult to

obtain definitive data.

The 2010 Update is the most comprehensive BIMCO/ISF study conducted so

far. It includes a more detailed assessment of the size of the commercial

trading fleet and its likely growth, while the supply estimates utilise more

robust information from many countries, including virtually all of the

principal labour supply nations. However, the improved methodology means

that the results cannot always be directly compared with those obtained

from the previous studies.

The Situation in 2010

Despite the global economic downturn, and the dramatic reduction in

demand for shipping services in 2009, the data suggests that while the

supply and demand for ratings are more or less balanced there are still some

shortages for officers, particularly for certain grades and for ship types such

as tankers and offshore support vessels. However, notwithstanding the

challenging trading conditions, levels of training of new entrants seem to

have been maintained or increased in many countries compared with 2005.

BACKGROUND


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SUPPLY

The worldwide supply of seafarers in 2010 is now estimated to be 624,000

officers and 747,000 ratings. This is based on the numbers holding STCWcertificates and is therefore somewhat broader and not directly comparable

to estimates in previous studies. It reflects significant increases in seafarer

supply in some countries, notably in China, India and the Philippines, as well

as in several European nations.

AREA CURRENT SUPPLY

OFFICERS

(1000S)

% RATINGS

(1000S)

%

OECD COUNTRIES 184 29.4 143 19.2

EASTERN EUROPEAN 127 20.3 109 14.6

AFRICA/LATIN AMERICA 50 8.0 112 15.0

FAR EAST 184 29.5 275 36.7

INDIAN SUB CONTINENT 80 12.8 108 14.5

ALL NATIONAL GROUPS 624 100 747 100

SOURCE: BIMCO/ISF ESTIMATES 2010

GLOBAL SEAFERERS SUPPLY BY BROAD GEOGRAPHICAL AREA


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29.40%

20.30%

8%

29.50%

12.80%

CURRENT SUPPLY OF OFFICERS WORLDWIDE

OECD COUNTRIES

EASTERN EUROPE

AFRICA/LATIN AMERICA

FAR EAST

INDIAN SUBCONTINENT


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DEMAND

Global demand estimates are based on a detailed review of the number, size

and type of ships in the world fleet, and revised estimates of manning levels

and back-up ratios currently applicable to different national fleets.

The initial demand estimate comb ines fleet size and information on manning

scales. This is then calibrated to be consistent with supply estimates. The

calibration is based on estimates of the overall supply/demand balance

derived from comprehensive data supplied by over 100 major companies,

and information from national administrations and a crewing experts survey.

Based on this evidence, the current estimate of worldwide demand for

seafarers in 2010 is 637,000 officers and 747,000 ratings.

SUPPLY/ DEMAND BALANCE

These results suggest that the situation in 2010 is one of approximate

balance between demand and supply for ratings with a modest overall

shortage of officers (about 2%); the implication being there is currently

not a serious shortage problem for officers in aggregate. This does not, of

course, mean that individual shipping companies are not experiencing

serious recruitment problems, but simply that overall supply and demand are

currently more or less in balance. This is perhaps not surprising given the

sharp contraction in the demand for sea transport in 2009 combined with

significant growth in total seafarer numbers.

Results from the company survey indicate problems with the supply of

particular grades of seafarer, such as senior officers and engineers in some

labor markets. There is also some evidence of continuing recruitment and

retention problems, especially in certain segments of the industry such as

tankers and offshore support vessels.

There is particular concern over the current and future availability of senior

management level officers, especially engineers, in the Far East and the

Indian Sub-Continent. Generally, however, there are few supply difficulties

reported for ratings. Future Supply / Demand Balances Benchmark

scenario

The 2010 Update presents various global supply/demand balance scenarios

for the next decade. The central or benchmark scenario represents BIMCO

and ISFs view of the most likely trends, based on recent developments and

the opinions of key players taken from the various surveys conducted for t he

study.


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1.2 THE INDIAN SITUATION

The latest what we heard was that National Shipping Board will revisit the

issue of providing tax benefits to Indian seafarers who are working in Indianflag vessels. It will take up this issue again with the Union Ministry ofFinance and the Shipping Ministry, according to its Chairman, Capt P.V.K

Mohan.

Today, an Indian seafarer working in a foreign ship does not pay any tax.However, for the same job, the seafarer in Indian flagship pays the tax. Dueto this disparity, Indians are not willing to work in Indian flag ships. This hasled to an acute shortage of officers in Indian ships.

Apart from the board, the shipping industry will shortly move the financeministry to review taxing seafarers that come under category of non-resident

Indians (NRIs) according to the proposed direct tax code (DTC).

The DTC has proposed that any NRI staying in India for over 60 days wouldbe liable to pay tax on global income. According to current norms, NRIs can

stay in India for 182 days without having to pay any tax.

The next few years will see substantial growth in global maritime trade,buoyed up by stable economic growth worldwide, according to the report.With burgeoning trade and corresponding growth in fleet, the demand forseafarers will also rise. This is good news for India. The demand forseafarers will likely grow by 20% by 2015, and India can aspire to meet a

large share of this growing need, if the country prepares for it accordingly.

Today, the shipping industry in India faces several challenges. Its ability toparticipate in the future growth could be hampered by issues like shortage ofskilled personnel, more stringent safety and training regulations. In addition,information on the shipping sector, its future outlook and the quality ofmaritime training is limited, which poses a challenge for aspirational growth.And there is no clear strategy to enable the growth of the industry further.

1.3 Shortage: Which Grade and How Much

The Worrying factor for Indian ship owners is that there is a shortage of

officers, this would adversely affect the Indian flagged vessels due to

continuing drift of personnel away from employment on Indian ships to

foreign flagged ships.


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RANKS UNDER SHORTAGE

Master Chief Engineer

Chief Officer Second Engineer

Second Officer Third Engineer

Third Officer Fourth Engineer

There is a Shortage of skilled Officers in Domestic shipping line as per

estimates received from The Indian National Shipowners

Association(INSA), short fall is about approximately 834 Officers in

Indian flag vessels.

1.4 Seafaring and Maritime sector

This shortage of seafarers is a matter of worldwide concern because many

of the skill sets needed in the broader maritime sector require seafaring

skills. The nature of the maritime sector is such that seafaring has

traditionally been viewed as the starting point which can lead to a range of

shore-based maritime careers. Seafaring skills and experience are viewed

as being of direct use and importance for a range of maritime shore-based

careers including pilotage, marine surveying, terminal/cargo operations,

port operations, ship management, marine administration, and maritime

education and training.

This flow of seafarers from ship to shore is important, as it ensures that

relevant skills and experience are not lost to the maritime industry. It is

generally accepted that a majority of ex- seafarers remain within the

shore-based maritime industry; however, if there are insufficient new

seafarer entrants, there are ultimately insufficient skilled seafarers to

move to shore employment. This is simply illustrated in the following

figure:


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When these five elements are in

alance there should

e no shortage of

silled personnel to meet the needs of the maritime sector; however, it

isclear that the s stem is no longer in

alance.

It would seem that in India the imbalance is not just a question of a lac

of numbers wanting to go to sea, but has also been caused b

bottlenec sin the s stem.

1.5Th keyissues

Limited availabilityofsea time

Lac

of flow-through from brown water to blue water fleet and

com

artmentalization

(E.g. qualified fishers not em

loyed in brown water fleet)

Com

any-centricrather than industry-wide views (e.g. prevalence of

poaching) In addition, the costs associated with turning new recruitsinto trained andcertificatedseafarers were identified as an impediment.

The following issues were raised:

No incentive for industryto train, e.g. there is no tonnage taxsystem

such as found in the UK

Employees have to fund allcosts associated with sea-time training

periods

Trainingcosts are borne bya few employers but benefit the wholeindustry


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The fact that training (costs and sea time) falls to a few employers, but

ultimately benefits the whole maritime sector, is a key cause of the

bottleneck in the system

The dilemma in which India finds itself is not unique, in that many

developed countries have faced similar problems and have tried a

variety of approaches to redress the shortage of skilled personnel for

their seafaring and broader maritime sectors.

2.1 The International Maritime OrganizationThe International Maritime Organisation (IMO) approach is to give weight

and credibility to the issue by joining with a number of international peak

bodies to encourage governments and industry to take concerted action to

redress the shortage of seafarers.

A campaign to address the global shortage of seafarers,

especially officers, which threatens the very future of the

international shipping industry, has been launched by the

International Maritime Organization in association with the

International Labor Organization, the "Round Table" of

shipping organizations BIMCO, ICS/ISF, INTERCARGO

and INTERTANKO and the International Transport

Workers' Federation.

...Amongst specific calls for action in the campaign

document (IMO 2008a), the shipping industry is urged to

take the lead and do more to promote itself through the

media, in particular the electronic media. The industry

should continue to provide support for and endorse

campaigns aimed at improving its image and use somekey industry figures as examples of career progression. It

is also urged to do more to make life on board and away

from home more akin to the life enjoyed by others

ashore; to encourage women to work in the seafaring

profession; and to promote the industry at non

maritime-related events.

2. Approaches taken to redress the skills

shortage


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Governments are asked to give greater prominence to the

maritime perspective, by doing more to support and

encourage the shipping industry in any initiatives it takes

to enhance its image and to remove adverse actions that

may damage that image. Maritime training facilities needto be resourced adequately (both in financial and human

resource terms) to ensure a supply of competent

seafarers. Governments could do much to promote a

wider take-up of a sea career through, for example,

recognition of sea service instead of compulsory military

service, training of jobless persons and promoting the

career for women.

IMO itself will develop a page on its public website

highlighting the types of career paths available to

seafarers, through links to industry sites. While on

missions abroad, where practicable, the Secretary-General

will visit maritime and non-maritime training facilities and

seafarer organizations to express support and address

both maritime and non-maritime Government

departments to promote shipping and seafaring. And the

ILO, which promotes the objective of decent work for all,

has adopted several instruments directly relevant to the

campaign and will support it in every way possible

An international campaign of this type is welcome, as it highlights the

seriousness of the problem and will undoubtedly be of some assistance.

The generalized nature of the approach points to the fact that outcomes

are likely to be patchy depending on the take-up of the challenge. The

key point of this approach is that the problem can only be solved with the

wholehearted support of government and the active involvement of

industry.

2.2 Norway: shore based maritime career pathIn an attempt to increase the skill base of the shore-based maritime

sector, a traineeship program was recently implemented in Norway by

the Norwegian Ship-owners Association (NSA). TheMaritime Trainee

program was launched in 2005 and recruits newly-qualified students

with a masters degree in economics, technology, law, or equivalent

qualifications from maritime university colleges. The first intake

completed its two-year program in the summer of 2007.


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NSA believes the scheme is unique in that it is the result of a number of

companies joining forces to mount a program offering trainees great

breadth in both their training and networking opportunities. Equally, the

trainees gain broader insights into the entire maritime industry than is

possible from a traineeship with a single company. The Maritime Trainee

scheme currently comprises more than 20 enterprises from across theentire maritime industry: shipping companies and rig operators, shipyard

and equipment industry, shipping-related services in classification,

banking, brokerage and legal services.

The ultimate aim is for the trainees to qualify for key positions in the

industry. Through postings to different enterprises, the trainees extend

their knowledge of a wide range of specialist and technical fields within

the entire maritime cluster, which is invaluable for their future careers

(Norwegian Ship owners Association 2008, p. 19).

2.3 United Kingdom: SMarT scheme and

tonnage tax obligations

Several countries provide government assistance for maritime training.

A variety of approaches is evident including assistance to the trainee,

assistance to the training provider, assistance to the employer, and

linking training requirements to beneficial commercial environments

such as a tonnage tax regime. The mechanisms used to deliver this

assistance vary from the simple to the complex depending upon the aim

to be achieved.

The UK instigated a training support scheme when it implemented its

strategy for reviving the British shipping industry. The support for

maritime training scheme (SMarT) was created by amalgamating the

Government Assistance for Training (GAFT) scheme and the Development

of Certificated Seafarers (DOCS) scheme. It provides support for four

areas of training, namely:

SMarT 1: training for first seamans Competency Certificate

SMarT 2: onshore training for second level seamans CompetencyCertificate

SMarT 3: onshore training to upgrade ratings skills

SMarT 4: onshore training for officers in line with the Amended STCWConvention


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Under the SMarT scheme, the UK Department for Transport through the

Marine and Coastguard Agency (MCA) administers financial assistance to

training providers for the training of officers and ratings. The support

available presently amounts to roughly half of the cost of training

provided by maritime colleges. In 20072008 the scheme cost GBP

10.835 million, which was a 10% increase on the previous year due to afurther increase in the numbers undergoing training (MCA 2008, p. 57).

Seafarer training is also a key element of the UK tonnage tax, which

imposes a minimum training obligation on companies entering the

scheme. This is to train one officer trainee per year for every

15 officer posts in the companys effective officer complement.

The obligation is cumulative and covers each trainee for up to three

years. If a company is not able to train enough cadets to meets its core

training commitment, it has to make payments in lieu of training to the

Maritime Training Trust (MTT). The MTT allocates the money received topromote UK-based seafarer training. In 2005, the tonnage tax training

penalty stood at 7,000 per annum or 24,000 per cadet placement.

The inextricable linking of the tonnage tax regime with training obligations

has assisted the UK in reducing, but not solving, its maritime skills

shortage by increasing the number of cadets undergoing training.

In their evidence to the UK House of Commons Select Committee onTransport (2005), the National Union of Marine, Aviation and ShippingTransport Officers (NUMAST) stated that:

the need for such a link was starkly indisputable. British

officer cadet training catastrophically reduced during the

1980s, leaving a huge "generation gap" in the country's

maritime skills base. A total of 2,315 cadets began

training in 1975. This fell to 1,274 in 1980 and to an

all-time low of 162 in 1987 (Note: Trinity House gave

evidence that it considered this to be only 15% of the

number required to maintain the then current officer pool).

Despite the training link with tonnage tax, cadet

recruitment since the scheme was launched has been

disappointing. The intake rose to 622 in 2002-03 and a

provisional estimate of 620 in 2003-04. This number is

barely half of the figure of 1,200, reported in 1996 in a

University of Wales study (commissioned by the

Department of Transport, the UK Chamber of Shipping and

the Marine Society) determined necessary just to stand

still.


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The House of Commons Transport Committee had a more positive view

when it reported that the number of cadets entering training had increased

significantly since the tonnage tax was introduced in 2000.

The Committee went on to suggest that an annual intake of 600 isconsiderably lower than the annual intake of 1,000 which LMU estimates

is needed to maintain officer numbers at their current level.

Whilst the linking of tonnage tax benefits to training obligations has

increased the number of cadets undergoing training, it is evident that the

annual intakes are still insufficient to provide for an adequate maritime

skills base. In a further attempt to redress these issues, a new campaign

to re- invigorate the UK Register was launched in February 2006.

The then Minister for Shipping held a reception for ship-

owners/operators at the National Maritime Museum inGreenwich with the theme ofSafety through

partnership. In addition, a review of the MCAs

Marketing Strategy was undertaken during the second

half of 2006 and the recommendations from this are

now being implemented. A measure of the success of

this campaign is that at the end of March

2007 the number of merchant vessels on the UK Ship

Register was 1,459, of which the gross tonnage was in

excess of 13 million for the first time in 10 years. The

Government are currently engaged with social partners,

considering joint proposals from the Chamber of

Shipping, National Union of Rail, Maritime and Transport

Workers (RMT) and Nautilus UK for stimulating UK and

European Economic Area (EEA) rating and officer training

and employment (House of Commons 2007b).

A reflection of the further success of this campaign is that in 2006/7,

there were around 730 new entrant officer cadets, the highest number

since the current system began in 1999. Provisional figures for newstarts in 2007/8 are higher again, standing at 800 (Department of

Transport 2008).

Bob Crow, general secretary of the ratings union RMT, was reported byLloyds List (2008) as saying:

It is all very well celebrating that the UK fleet is growing,


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Greece, Ireland, Portugal, and UK .

The Irish Government has adopted a different approach to the

maritime skills shortage issue by focusing on and encouraging seafarer

training. In 1999 it established the Irish Maritime Development Office

(IMDO) as a statutory government agency with responsibility for thedevelopment of the maritime sector. Amongst its responsibilities, the

IMDO oversees and coordinates seafarer development including

maritime education and training.

The government is aware that the difficulty is not one of encouraging

shipping companies to undertake training, but of attracting young people

to the sector. For this reason the government decided there should be no

commitments or financial penalties linking seafarer training to the Irish

tonnage tax regime, rather the government decided to invest directly in:

A EUR 58m state-of-the-art National Maritime College

New and more appropriate educational courses

Grants for trainee officers

Increased tax allowances for seafarers (IMDO 2008a)

In Ireland, once a cadet is accepted into nautical college, training to their

1st Certification of Competency occurs with financial support from the

governments Irish Seafarer Education Assistance Scheme (ISEAS). Thistraining grant covers all costs for mandatory training courses and, inaddition, a seagoing training allowance of EUR 350.00 is made available foreach cadet on a monthly basis. The overall maximum figures in support of

seagoing training toward the attainment of the 1st Certificate ofCompetency are:

Deck Cadet: EUR 5250 / cadet (15 months)

Engineering Cadet: EUR 3150 / cadet (9 months)

Rating Trainee: EUR 3150 / cadet (9 months)

The ISEAS provides funding to 90 cadets per year and to 25 officers

per year studying for higher certificates of competency.

In effect, a ship operator offering training berths to Irish cadets can

benefit from high quality; well- trained officers who have gained their

experience and qualifications on board that companys vessels, and are


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familiar with the operations, policies and ethos of the company, at no

cost.

The Irish approach, which provides government grants to cover the costs

of training both ashore and at sea, seeks to attract new entrants and

encourage ship operators to provide training berths.

2.6 Hong Kong: trainee support

A different approach has been taken by Hong Kong, where it is

recognized that some seafaring experience is a valuable precursor to

working in the shore-based maritime industry. In order to enhance the

supply of local qualified personnel with sea-going experience to work in

the maritime industry, the Hong Kong Government, with the full support

of the Hong Kong Maritime Industry Council, set up the Sea-going

Training Incentive Scheme in 2004.

This training scheme provides financial incentive for people to take up

sea-going training as cadets, which paves the way for them to become

shore-based professionals in the maritime industry. The scheme is

administered by the Marine Department, and a cadet may receive as an

incentiveHK$ 4,000 per month during the training period. The incentive is paid to thesuccessful applicants by

The Marine Department upon completion of each employment contract upto the maximum training

Period of 24 months for a deck cadet and 6 months for an engineer cadet.

To be eligible an applicant should:

be a Hong Kong permanent resident

be a graduate from a maritime training institute recognized by thedepartment

provide proof of employment as a cadet

register as a seafarer with the department

Not have been granted other kinds of similar financial assistance

At the end of the training period, the cadets will qualify to sit for the Class 3Deck/Engineer Officer

Examination (Hong Kong Maritime Industry Council 2007).

The scheme had an initial allocation of HK$ 9 million and 32 applications

were approved in the first year (2005); training completions were reported


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as 6 in 2005, 13 in 2006, whilst in 2007 it was reported that, thus far, 72

deck cadets and engine cadets had joined the Sea-going Training Incentive

Scheme (Marine Department 2005, 2006, 2007). In a briefing paper to the

Legislative Council Panel on Economic Services (2007) it was reported that

62 cadets had joined the scheme since its launch in 2004, and 18 of them

had passed their first professional examination.

Whilst the numbers involved are relatively small, the Hong Kong

approach is a good example of government and industry ensuring that

there is a flow-through of appropriate skills to the shore-based

maritime industry.

3.1 Solutions for shortage caused by lack of

training berths

Increasing the number of ships on a countrys register, by using the right

incentives to attract ship operators, can increase the number of training

berths available. As part of their tonnage tax regime, some countries link

a requirement to provide training berths to the incentives used to attract

additional ship operators. Well-tried and tested incentives to attract ship

operators include:

Tonnage tax...This is a tax based on the tonnage of a vessel, ratherthan the income it earns.

This means that an operator that invests and registers a ship under

the national flag can opt into the tonnage tax regime, thus creating

certainty and a lower rate of tax which ensures the ship is more

internationally competitive.

Second register...This is sometimes referred to as a countrys

international register. The aim is to minimize the loss of tonnage

from a flag by effectively encouraging a ship owner to remain underthe auspices of the state while benefiting from a number of

enticements such as lower taxation and less regulated crewing

requirements .

3.

Summary of solutions


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Financial incentives...These are often referred to as subsidies

and may be direct and/or indirect in nature. Incentives include

accelerated depreciation (which lowers taxable income) and

CABOTAGE (which reserves coastal trade for national flag

shipping, thus protecting it from international ship operators with

lower cost structures).

3.2 Solutions for shortage caused by costs

imposed on employers

Some countries provide direct financial support/incentives for maritime

training. This support may be available to some or all of the following:

Trainees, e.g. financial incentive to cover training costs ashore and/orafloat

Ship operators, e.g. financial incentive to assist with costs of

training a seafarer ashore and/or afloat

Maritime education and training institutions, e.g. financial

incentive to assist with costs of providing seafarer training courses

3.3Solutions for shortage caused by lackof local entrants to seafaring

These approaches tend to be either very general or relatively narrow in

nature and, therefore, can be viewed as underpinning activities to the

more comprehensive solutions. They include:

Recruitment campaigns e.g. IMO Go to Sea campaign

Second register e.g. allows labor laws to be modified to employ

seafarers who are not nationals, thus reducing pressure on thenumber of local seafarers needing to be employed

Making qualified seafarers a priority immigration category

Attracting ex-seafarers by use of sign-on bonus, part-time employment

etc.


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3.4 Solutions for shortage caused by poor

retention rates of trained seafarers

These solutions tend to focus on financial incentives to retain seafarers at

sea and keeping maritime skills in the broader maritime industry by

improving career prospects. These approaches include:

Providing loyalty bonuses for seafarers to remain at sea forx

years (with financial penalty for leaving early)

Improving the professional recognition and treatment of

seafarers, as well as providing adequate employment conditions

Sponsoring training to progress a career within a company

Supporting career progression, sea, sea to shore, and ashore as

part of the employment package

3.5 Themes identified by the review

In the context of the Indian maritime skills shortages, it is evident that the

limited number of training berths available is a significant problem which

severely limits the number of new entrants which can receive on-board

training. Additionally, the costs of training are borne by a relatively small

number of ship operators and this is clearly inequitable as, ultimately, the

whole industry benefits.

To address these two critical issues it is obviously necessary to increase theNumber of training berths available and ameliorate the costs of training.

The common themes identified by this review of solutions to the maritimeskills shortage are:

1. Government policies which create a ship operating environment thatreflects the important requirement for a robust national maritime skillsbase; and

2. Government policies which support the users and providers of maritime

education and training.


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4.1 A new policy framework the last chance?

Existing Measure taken by MoS and DGS

According to Indian National Ship owners Association (INSA), there isa major focus in shipping today on the so called human element issuessuch as training and safety management. Society at large demands highstandards of performance from the personnel engaged in the transportsector. Adoption and implementation of good employment practice is also anecessary part of meeting these demands. Seafaring is a unique professionand the industry offers well-paid employment and rewarding and interestingcareer at sea which comfortably exceeds best practices ashore.

The Ministry of Shipping and D.G. Shipping have in the recent past taken anumber of decisions in respect of employment of seafarers, in line with theliberalization process initiated by the Government of India in 1991. The mostprominent among them being;

India is also actively participating in the deliberations of ILO to develop aconsolidated Maritime Labour Standard, evolving seafarers identitydocuments, etc.

One of the unique problems faced by Indian shipowners is that of retainingquality officers on their ships. This has arisen due to an anomaly in thetaxation of Indian seafarers employed on Indian ships vis--vis foreign ships.Enhancement of the emoluments of the personnel has not helped in any way

4. An Indian approach

* Revised guidelines u/S.456 of M.S. Act for registration and

employment of seafarers in India

* Removal of distinction as between foreign going and home tradeCDCs

* Amendment to the provision of Secs. 76, 87, 95, 97ofChapter-II

of the M.S. Act 1958

* Revised 2-page format for Articles of Agreement for seamen

* Minimum safe manning scales

* Registration and licensing of recruiting/manning agents


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to check their continuing drift for foreign flag employment where they earntheir income in foreign currency without any tax liability.

4.2 An effective solution?

In India it started with DG Shippings help line and seeking helpline fromDG Shipping.

By 2015, global demand for Officers and Ratings is expected to increase by20% each, based on fleet growth trends and manning requirements, hereiterates.

The context is crystal clear. To achieve 9% share of seafaring manpower,India will have to supply 65000 additional Officers and 45000 additionalRatings over next 5 years and for this pre-sea course capacity has to almostdouble for Ratings and triple for Officers in next 5 years.

India also faces tough competition from China, Philippines, Ukraine, Turkeyand Russia. Unfortunately, no strategy is being implemented currently onhow to develop industry further and lack of a clear aspiration for DGShipping.

India is well poised with sustainable advantages to gain a high share of theexpected growth in the maritime industry.

Action and Result oriented lists out the details:-

*Action taken review every month. A score card on the nextMaritime Celebration Day

* League Table of Training Institution: Star rating based on

Placements, facilities, faculty and fees matrix

* Make more training berths available: Tonnage Tax,Chartering

conditions create market in training man-months, Training

commitments against dispensations, Ships of subsidiaries outsideIndia to be allowed to provide training.

* Incentivize tanker based trainings: 12 months ofCoastal tankers =

18 of rest

* Reduce CoC and examination ordeal: Online examination,

psychometric tests, incentivize only Oral exam candidates to have

anytime anywhere exam

* Improve Grading System of Training Institutions.


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For Indian shipping to survive, but more importantly for it to grow, it

must be competitive. Any government which believes it is in the national

interest for there to be an indigenous, local ship owning/operatingindustry has taken policy decisions to create an operating environment

which ensures its ships are competitive. These policies include some or

all of the following:

The Indian Government has recognized that a problem exists, and it now

needs to accept that it will fund the solution. The critical requirement is to

fund an operating environment which ensures Indian ships are

competitive. Once this is in place, associated issues can be successfully

resolved.

In the context of the maritime skills shortage, and in conclusion:

A government-supported operating environment ensures

Indian ships are competitive, which

Increases the attractiveness of the Indian ship register, which

Increases the number of Indian ships, which

Increases the number of training berths available, which

Provides opportunities for increased numbers of trainees, which

Increases the maritime skills base, and

Reduces/eliminates the maritime skills shortage.

Second register

Tonnage tax

Accelerated depreciation

Cabotage

Employment costs subsidies

Training grants

5. Conclusion


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james project1

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