Smoke billows out from the Singaporean Vessel MV Wan Hai 503 during a salvage operation being carried out by the Indian Coast Guard (ICG), along with the Indian Navy and Indian Air Force, in Kochi on June 13, 2025.
| Photo Credit: X/@IndiaCoastGuard via ANI Video Grab
Who regulates global shipping?
Global merchant shipping is primarily regulated by the International Maritime Organization (IMO). The IMO is among the most powerful U.N. agencies, as many of its prescriptions and guidelines apply across shipping, given the multinational nature of the industry. Countries that are members of the IMO, India included, sign various conventions that lay down norms regarding pollution, safety, accidents, liabilities and responsibilities, after which member states pass appropriate domestic legislation or lay down rules that sync with convention prescriptions. In India, it is the Directorate General (DG) of Shipping which issues notices for such purposes. In some cases, Parliament sanction may also be needed.
In general, India is a signatory to many conventions, barring a few, such as the 2004 Ballast Water Convention and the 2010 Hazardous and Noxious Substances (HNS) Convention. The HNS Convention deals with liability and compensation for damage related to the carriage of hazardous and noxious substances on ships. Given the increasing accidents on its coast, India may be served by ratifying this convention. In the case of the ELSA 3, in which many containers carrying noxious substances such as calcium carbide sank, India will seek remedies under its own merchant shipping laws.
Ships are owned by companies across the world. Greece and China lead in being homes to many of these companies. But the ships are often registered in various other nations for convenience and ease of operations. Though members of the IMO and governed by IMO norms, such nations offer less intrusive scrutiny and are therefore called Flags of Convenience (FOC). Liberia is one such country, Marshall Islands is another.
Who is liable for the loss of cargo and any damage to the environment?
The ship owner is liable for both. The trade of goods is governed by a contract called the bill of lading, which covers the transport of goods from one port to another, and is issued by the ship owner to the exporter during the loading of cargo. The owner of the bill of lading is the owner of the cargo. The bill of lading is a contract that lays down that the owner undertakes to ship the cargo from one port to another among other things. The bill of lading is transferred to the importer or the consignee, as per various shipment forms, after payment to the exporter. Typically, the importer opens a letter of credit to the exporter, and the bank then extends the credit and acquires the bill of lading from the exporter. When the receiver receives the cargo and makes the payment, he gets the bill of lading from the bank.
In case of damage or loss of cargo, the ship owner has to pay whoever owns the bill of lading. But that payment is covered by the Protection and Indemnity (P&I) Club, which is a cluster of several insurance companies who share the risk. Damage to the body of the ship and machinery, that is a business loss for the owner, is usually covered by indemnity. But in P&I, the insurer protects the owner against any claims on the owner too, such as in the case of damage to environment or loss of cargo or loss of life onboard the ship and elsewhere as a consequence of an accident involving the ship.
International conventions have capped the liability of the ship owner on loss of cargo, but there is no limit on claims against environment damage such as in the case of oil pollution or hazardous substances. The last could apply to the sunken containers of ELSA 3 or Wan Hai 503 that caught fire. Oil pollution damages itself cover a vast range — impacting fish catch, affecting tourism, loss to other businesses, transportation and so on. The International Convention for the Prevention of Pollution from Ships upholds the polluter pays principle. Sometimes, however, national laws do protect against extended and potentially endless claims.
Who should salvage a ship that has sank?
This responsibility also rests with the ship owner. The Nairobi Convention on the Removal of Wrecks, 2007 governs this situation, and India is a signatory. Under this, the ship owner whose ship has sunk within the sovereign waters of India — up to 200 nautical miles from a reference line on the coast — has to salvage the ship. In case the ship cannot be refloated, especially if the waters are too deep, then the ship owner is liable for any claims of damage.
Why do ships still sink?
While advanced materials, knowledge, expertise and skill go into building ships, they are exposed to the vagaries of the sea and its multi-layered impact cannot always be predicted in a pinpointed way. For instance, in ELSA 3, as the ship started tilting to one side — listing, in shipping parlance — containers that were stowed on top fell into the sea that was already rough. This led to the list increasing on the heavier side which could have led to the ship sinking.
Quite often, a series of errors, mistakes and small incidents sync to create a major accident. By themselves, each of these mistakes and incidents are not a cause of much concern. Too often, such mistakes are manmade and often, egregious. Today merchant ships tend to sail close to the coast in search of mobile phone signals so that seafarers with roaming facilities can stay in touch with their friends or family. Wakashio, a bulk carrier, ran aground off Mauritius in 2020, leading to an oil spill, because it went too close to the shore in search of mobile phone signals. This was during the COVID-19 pandemic when seafarers were spending extended periods out at sea amidst concerns about their health and that of their families’.
The unsinkable Titanic sank because of human error. But after the sinking, a convention called Safety of Life At Sea (SOLAS) came into being. SOLAS is one of the key conventions that govern shipping and is often revised. A key lesson from the Titanic, which has now been implemented as a SOLAS norm, is that lifeboats on either side of the ship should have enough capacity to carry the number of people the ship is designed to carry. This means that if the ship tilts to one side and the lifeboats on only one side are accessible, even then, they should be able to carry all those people on board to safety.
The shipping industry learns from each accident. The IMO revises and supplements its guidelines periodically regarding ship design and construction that are then adopted by the industry.
Published – June 15, 2025 04:34 am IST
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