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OPINION | Repeal section 16(1) of the Merchants Shipping Act 2009

Attempts by retired President Uhuru Kenyatta to revive the Kenya National Shipping Line (KNSL) did not meet the required expectations. PHOTO/FILE



The Bill on amendment of Merchant Shipping Act by the Leader of Majority at the National Assembly Mr Kimani Ichung’wa is commendable, but he must be careful not to repeat the same mistakes former President Uhuru Kenyatta’s administration made.

While the initiative by the Uhuru administration was excellent, the whole idea required further technical guidance not only from maritime experts, but also from other stakeholders.

In my view, it equally required public policy experts and legal minds to advice the government on how the process should have been initiated, driven and executed.

Step 1: Experts within the State Department of Maritime Affairs led by the PS ought to have first competitively initiated a technical study on four key aspects: The economic viability of reviving Kenya National Shipping Line (KNSL) or whether to privatize it; a Cost Benefit Analysis of KNSL going it alone in handling shipping operations or operating through a public private partnership (PPP) arrangement with reputable international shipping line; legal implications as per the advisory opinion from the office of the Attorney General; and lastly, tabling of the report by the State Department before the stakeholders for their inputs as a constitutional requirement on public participation before it’s adopted by the Ministry.

Step 2: The Minister for transport ought to have then prepared a cabinet memorandum for tabling before the full cabinet of the government of Kenya chaired by the President for discussion and approval.

Step 3: The Attorney general then ought to have prepared the Merchant and Shipping Act Amendment Bill containing the appropriate changes that should have been effected in the law to make the initiative legally possible (above board).

Step 4: The Amendment/ Bill together with the technical report ought to have been then handed over to the Leader of Government Business of the National Assembly and his Counterpart at the Senate who were also the Majority Leaders of both houses.

Step 5: These gentlemen would have included it in the Order Papers of both houses as both the House Business Committees of the National Assembly and the Senate would have prioritized it since Government Bills are always given first priority under parliamentary standing orders.

Step 6: After the first reading the Clerk of the National Assembly would have invited members of the public through newspaper adverts and their website to submit written memorandums on the proposed amendments either directly to the two clerks, MPs or the Chairpersons of the Parliamentary Committee on Transport at the Senate and National Assembly as a fulfillment of public participation requirement per the Constitution of Kenya 2010.

Since this would be a money Bill the same ought to have been forwarded to also the finance and budget committee of the senate and parliament for their advisory opinion.

Step 7: The Parliamentary Committees would have consolidated the public views and tabled the Bill with the report in the house for consideration, amendment, rejection and adoption/passage.

Step 8: The bill would have then been sent to the president for assent to become a law.

Step 9: The Minister for Transport would have signed it thereby giving it a commencement date.

Step 10: the State Department in the Ministry of Transport would then have issued an international tender seeking potential reputable global shipping lines to apply for consideration by the Government of Kenya on a PPP opportunity with the KNSL.

Step 11: Successful firms would have been given conditional offers by the government to fulfill first and those who will provide the best offer to the people of Kenya would have been given the opportunity to partner with KNSL.

A cruise ship at Mombasa port. The success of put in place the Kenya National Shipping Line would spur cruise tourism. PHOTO/FILE

Unfortunately, all these procedures were trashed by political operatives in the Jubilee administration. In their apparent self-interests and greed, they trampled on all the above mandatory processes defined by the constitution and law when it comes to disposal of public interests and property in a government agency or institution.

Contracts were canvased in secrecy and the public only became aware after a single sourced global shipping line ended up being awarded the contract to work with KNSL.

Maritime policy, Public policy and public administration experts reached out to officials at the state department with a view to make the entire initiative above board but they ignored.

The idea to revive KNSL is superb and we fully support it but it should be done within the law where transparency and public participation should always be the guiding principles of the process.

Kenya National Shipping Line has the potential to connect the port of Mombasa and Lamu to 550 sea ports of the world. Currently Kenya has 24 foreign shipping lines operating at the port of Mombasa while the port is connected to only 80 ports in the world.

Current government plans on shipping and blue economy calls for an immediate re-look at the country’s Merchant Shipping Act.

A key provision in the Merchant Shipping Act (2009) states as follows:

“No owner of a ship or person providing the service of a shipping line shall, either directly or indirectly, provide in the maritime industry the service of crewing agencies, pilotage, clearing and forwarding agent, port facility operator, shipping agent, terminal operator and container freight station.”

That clause effectively blocks foreign shipping lines from engaging in other businesses and confines them to cargo haulage, and that has been the case for the last 10 years that the law has been in effect.

Roads, Transport and Public Works Cabinet Secretary, Kipchumba Murkomen, while on a recent tour at Mombasa Port. PHOTO/FILE

Therefore, there is a need to repeal the draconian law, and come up with a Cabotage Law. Most countries that have a coastline normally prohibit cabotage by merchant ships in order to protect the domestic shipping industry from foreign competition, preserve domestically-owned shipping infrastructure for national security purposes, and ensure safety in congested territorial waters.

The whole purpose of Section 16 of the Merchant shipping Act 2009 is to allow the “local talents/entrepreneurs” to venture into these jobs/businesses of providing services to ship owners – both local and foreign – while barring outsiders from setting camp here in Kenya provide services that can otherwise be created/offered by locals.

An amendment to the law should bear in mind the current realities and dynamics in the maritime world.

One such reality is that ship-owners, these days, do not necessarily operate their own ships.  They “outsource” many services, for instance, technical and crew management services.

A typical shipping line will have a very small office in, say, the UK, and a Technical management service office in Hong Kong, a Crewing office in Manilla, a Commercial management office in New York, and perhaps, a Singapore Bunker Supply office.

There is a need to support President William Ruto and the Leader of Majority Mr Ichung’wa in the move to revitalize the KNSL and therefore create jobs for the Seafarers and the forgotten and down trodden Coastal Youth.

The government has a political, moral, and importantly constitutional duty to create the required legal and administrative framework to revamp the sector with participation of all. This responsibility is more critical to the citizens of the Coast, who has for many years been marginalized, the result of which has been high poverty levels and massive unemployment.

This has in turn caused a social crisis in the form of violent extremism, drug abuse, radicalization, and hopelessness.

The way forward is to repeal or make amendments on section 16 of the Merchant Shipping Act 2009.

Andrew Mwangura is a Public Intellectual at Nautical Advisory Services.

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