From UPSC perspective, the following things are important :
Prelims level : Not much.
Mains level : Paper 2- India's role and interest's in IMO and consequences.
The International Maritime Organization (IMO), had mandated that merchant ships should not burn fuel with sulphur content greater than 0.5% beginning January 1.
Why the new sulphur content limit matters?
- The previous limit of 3.5 %: Before the ban, fuel had a comfortable sulphur content limit of 3.5%, which was applicable to most parts of the world.
- Problem with low content fuel: Many industry professionals feared that the new very-low-sulphur fuel would be incompatible with the engines and other vessel equipment.
- Problems with past US limits: Past mandates on sulphur limits in American waters had led to many technical problems. There have been instances of ships having been stranded after fine particles separated out from the fuel, damaging equipment and clogging up devices.
How such regulations matter for India?
- Sulphur cap one of the many problems: The global sulphur cap is only one of the many environment-related regulations that have been shaking up the shipping industry.
- The industry is generally risk-averse and slow to accept changes.
- For instance, efforts are ongoing to reduce nitrogen oxides (NOx) and ozone-depleting gases.
- IMO project to decarbonise shipping: Further, the IMO has announced an ambitious project to decarbonise shipping in order to reduce carbon emissions.
- How it matters for India? These regulations are triggering massive technological, operational and structural changes.
- They come at a price which will have to be borne to a large extent by developing countries such as India.
- India among 10 countries: The IMO currently lists India as among the 10 states with the “largest interest in international seaborne trade”.
- Inadequate participation of India: But India’s participation in the IMO to advance its national interests has been desultory and woefully inadequate.
- How it could matters: The sulphur cap, for instance-
- Will reduce emissions.
- Reduce the health impact on coastal populations but-
- Ship operational costs are going up since the new fuel product is more expensive.
- Refineries struggling to meet demand: As refineries including those in India struggle to meet the demand, freight costs have started moving up, with a cascading effect on retail prices.
Significance of shipping and the role of IMO
- Significance of shipping: Shipping, which accounts for over 90% by volume and about 80% by value of global trade.
- Role of IMO: It is a highly regulated industry with a range of legislation promulgated by the IMO.
- The IMO currently has 174 member states and three associate members; there are also scores of non-governmental and inter-governmental organisations.
- The IMO’s policies or conventions have a serious impact on every aspect of shipping including the cost of maritime trade.
- How IMO functions
- The IMO, like any other UN agency, is primarily a secretariat, which facilitates decision-making processes on all maritime matters through meetings of member states.
- How treaties are made? The binding instruments are brought in through the conventions -to which member states sign on to for compliance -as well as amendments to the same and related codes.
- Structure of IMO: Structurally, maritime matters are dealt with by the committees of the IMO –
- The Maritime Safety Committee (MSC).
- Marine Environment Protection Committee (MEPC).
- Technical Cooperation Committee.
- Legal Committee and the Facilitation Committee.
- Each committee is designated a separate aspect of shipping and supported by sub-committees. Working groups and correspondence groups support the subcommittees.
- Role of subcommittees of IMO: The subcommittees are the main working organs, where the proposals from a member state are parsed before they are forwarded to one of the main committees.
- The main committees, thereafter, with the nod of the Assembly, put the approved proposal for enactment through the Convention, amendments, and codes or circulars.
India’s inadequate efforts at protecting the interest
- How other countries deal with the issues: To ensure that their maritime interests are protected, the European countries move their proposals in unison and voting or support are given en bloc.
- Permanent representative: China, Japan, Singapore, Korea and a few others represent their interests through their permanent representative as well as ensuring that a large delegation takes part and intervenes in the meetings.
- How India is falling short? While these countries have fiercely protected their interests, India has not.
- No permanent representative: For example, its permanent representative post at London has remained vacant for the last 25 years.
- Representation at meetings is often through a skeletal delegation
- India’s presentation inadequate: A review of IMO documents shows that the number of submissions made by India in the recent past has been measly and not in proportion to India’s stakes in global shipping.
- “High-Risk Area” demarcation issue: The promulgation of “High-Risk Areas” when piracy was at its peak and dominated media headlines.
- What happened in the issue? The IMO’s demarcation resulted in half the Arabian Sea and virtually the entire south-west coast of India being seen as piracy-infested, despite the presence of the Indian Navy and Coast Guard.
- The “Enrica Lexie” shooting incident of 2012, off the coast of Kerala, was a direct fallout of the demarcation.
- What were the consequences of the demarcation issue?
- Increase in insurance costs: The “High-Risk Area” formulation led to a ballooning of insurance costs; it affected goods coming into or out of India.
- It took great efforts to revoke the promulgation and negate the financial burden.
- The episode highlighted India’s apathy and inadequate representation at the IMO.
- NavIC introduction difficulty: There was also great difficulty in introducing the indigenously designed NavIC (NAVigation with Indian Constellation) in the worldwide maritime navigation system.
- What could be the consequences in future?
- EU’s documented procedure: In contrast, the European Union has a documented procedure on how to influence the IMO.
- Agenda driven by developed countries: New legislative mandates, fitment of new equipment and changes to ship structural designs being brought on have been driven by developed countries.
- Consequences for India: All the issues pushed by developed countries are not entirely pragmatic from the point of view of India’s interests.
- Further, it will not be mere speculation to see them as efforts to push products and companies based in the West.
So far, India’s presence and participation in the IMO has been at the individual level. India should now make its presence felt so that its national interests are served. It is time India regained its status as a major maritime power.