Sea Consortium fined US$40,000 for violating Bangladesh flag rules

SINGAPORE : Singapore-based feeder vessel operator X-Press Feeders/Sea Consortium Pte Ltd has paid Tk 4.78 million (around US$41,000) as a fine for violating the Bangladesh Flag Vessels (Protection) Act 2019.

After the payment, the authorities released one of the operator’s container vessels, namely X-PRESS LHOTSE, which was detained for two days at the outer anchorage of Chittagong Port with 1,600 TEU boxes onboard.

The operator paid the whole amount of the fine fearing that two other vessels, namely X-PRESS NUPTSE and X-PRESS NILWALA, which also operate on this route regularly, could also be detained.

In January, the Mercantile Marine Office in Chittagong had fined the three vessels for carrying cargo without obtaining a waiver certificate. Under the Flag Vessel Act, obtaining a waiver certificate is mandatory for foreign flag vessels to load cargo to and from Bangladesh.

However, Sea Consortium officials alleged that the operator did not violate the Flag Vessel Act and the company was fined “arbitrarily” by the Mercantile Marine Office. Even they were not invited for a hearing while the company filed an appeal petition against the administrative penalty to the Ministry of Shipping.

The Flag Vessel Act has come as a big barrier for the operation of foreign flag vessels which carry around 92% of cargo to and from Bangladesh, they said.

Saiful Islam, general manager of Sea Consortium Bangladesh Ltd, said local flag carrier vessels can carry around 8% of cargo from Bangladesh while the remaining 92% are carried by foreign carriers.

But each time the foreign flag vessels need to seek waiver from the Mercantile Marine Office much before the sailing time and load cargo without uncertainty of getting sailing permission, he pointed out.

Islam added the Flag Vessel Act stipulates that Bangladeshi flag vessels will carry 50% of cargo. “But our company, as a single operator, did not carry 50% of cargo but was fined illogically. The Mercantile Marine Office is deliberately targeting our company again and again,” he noted.

As the feeder vessel X-PRESS LHOTSE remained detained for two days with 1,600 TEU of containers onboard, the majority of which contained outbound apparel items, the garment manufacturers, the main users of the Chittagong port reacted sharply and sought immediate release of the vessel to ensure the boxes can board in mother vessels in Colombo in time.

Unless they can reach Colombo in time, they risk missing the designated mother vessel and may not be able to reach the final destinations in Europe or America and the buyers may not agree to accept them, said the manufacturers.

Hasan Abdullah, chairman of Port and Shipping Committee, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), in a letter to the principal officer of the Mercantile Marine Office, expressed resentment as the vessel was not allowed to sail in time.

“Outside jurisdiction of Admiralty Court and without assigning any reasons whatsoever hereinbefore we have no clue that pending settlement of certain financial issues – you have the extra judicial power to detain &/or impound &/or arrest any vessel that too after allowing to load on board export containers,” he noted.

“…we request you to issue the necessary documents required for the vessel’s departure, considering the possible consequences for our member industries,” Abdullah wrote.