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Sunday, 29 May 2011

The Great Iron Ore Export scam - from Indian seaports . . .

Previously published at Moneylife . . .

The Great Iron Ore Rip-Off: Buy from India for 60 cents, and sell it for around $200 a tonne (landed price) overseas

As a nation, we are peddling our scarce natural resources that cannot be replenished. Global players are mining iron ore for a song, destroying the natural habitat around the mines and shipping it to metal-hungry destinations and making super-profits. As usual, the powers-that-be are silent  

As an ex-seafarer, the first cargo I loaded on a ship, way back in 1975, was iron ore from Vishakhapatnam (or Vizag) to Japan. Always interested in matters beyond my purview, I remember that the charterer in this case was the government-controlled monolith, MMTC (Minerals and Metals TradingCorporation), the buyer a Japanese trading house connected with Sumitomo-and that the price achieved for this shipment, delivered at the port of Nagoya, way back then, was around $17 a tonne.

The price that the Indian Government achieved, through MMTC, was around $10-$11 per tonne -ex-Vizag, loaded onto our ship. The rest was on freight and other costs. Laughingly, it was pointed out that kickbacks were high, around 15%-20%, but were likely to be impacted because the Emergency was on everybody's heads in those days. Even people at MMTC and STC (StateTrading Corporation) had to be careful.

This was for what is known as '60% FE lumps'. A very highly sought-after grade of iron ore that we export from India, and the rate is set in such a way that it permits for variations in quality along a few other parameters, using this as a benchmark.

60% FE in lumps is about as good as it gets. The Japanese term for it was the equivalent of malai, or "full cream", and we have a lot more in India. In the area, largely, called "Maoist", but that's not the subject of the debate.

The debate then was whether it was more profitable for the Nation of India to ship this iron ore to the US-East Coast (Norfolk) area-where the price achieved was around $25-$27 a tonne, landed.

What came in the way, in those days, was not just the freight rate-ships had to go around the Cape, since the Suez was closed. In addition, it was whispered,doing business with Japan was better for some corrupt people, since the Japanese were rumoured to not be averse to the idea of more than a few dollars per tonne as kickbacks, and making "relationships", while the Americans got slightly moralistic about such things then-5% to 7% was what was supposed to be their limit, and you often had to accept it in wheat.

Which was not a good idea, because India was getting 'free' wheat under the PL-480 scheme in any case in those days, which is a scam many may have forgotten.

In addition, the Japanese were very keen to provide the funding as well astechnology for building a railway line from Vizag into the pristine Aruku Valley area, to get the iron ore out more efficiently, and this was pushed through as a 'people-friendly' step to help connect one of the remotest parts of central India to the rest of the country.

Of course, nothing is free, so India was going to pay the Japanese back. In iron ore. And remember, west of Hong Kong was a huge swamp called the Pearl River Delta, then. And South Korea? South Korea was still teaching its sailors to work on ships. Under Indians.

So, we sold our iron ore in Aruku Valley to the Japanese for a song. How much they sell it in further trading, now that China and South Korea are also consumers, would be interesting to learn. Chances are, the onwards sale is atmarket prices, while the first sale is at the old pre-negotiated prices. We are still paying for that Railway Line, remember?

Think of it like this-you have a home in a remote part of, say, Maharashtra. You have some great boulders there, which can be extracted, broken down, and made into brilliant granite slabs. But you don't want to sell them or move them, even to the nice Japanese guy who comes to your house, because technically you can't and even if you could, you want to sell it one rock at a time, because the house is in a remote place.

So now the Japanese guy goes back to the government guy, and makes him a deal-the Japanese will pretend he is loaning money to the government, which will then cover the loan through its public sector banks, and the Japanese guy will then make a road to your house which nobody else can use, not even you, and then he will take all the granite away as soon as he can, for free, in payment for the road he helped build.

You will be left sucking your thumb, you may have to pay a toll to enter your own house on that nice new road, and if you protest, you will be called Maoist. But then, this is not about them.

That railway line from Vizag up into one of the prettiest parts of India rapidly being mined out of existence (the natural caverns being formed nearby are used as oil reservoirs, incidentally) now stands as a tribute to Japanese engineering skills. And runs between 40-80 rakes of iron loaded trains to the port cities of Vizag and Gangavaram, from where it heads off mainly towards the hungry steel mills of China, South Korea and Japan. But there are hardly any passenger trains on that route, and the few that operate, have to give way to the iron ore trains. I have been on this route once-and reached the other end 24 hours late, as we kept giving "pass" to iron ore rakes thundering past us.

To anybody except the most foolish it is clear to those who know this industrythat we are as a nation selling our resources. Fair enough, this does not want to become yet another article on the political and sociological, as well as economic aspects of this trade-people have been called 'Maoist' for less. But can we look at the numbers again?

The international prices of iron ore are shooting upwards, by as much as $20 to $30 in the last few weeks, and anticipated to go up by a similar amount to around $200 per metric tonne in the next few months. This is despite much lower requirements in Japan, and slightly reduced requirements in China, the two top global markets for iron ore. The top three suppliers of iron ore are Australia, Brazil and India.

The indicative price currently is around $170 per metric tonne for iron-ore lumps with a 60% FE content, cost plus freight landed at Qingdao in China as a benchmark, and freight rates varying from $8 to $16 per metric tonne depending on size of ship as well as market forces on freight rates. The saleprice of this kind of iron ore from Australia or Brazil is around $130-$150 per metric tonne, and rising, with some minor amounts for insurance, loading costs, holding costs, and other such expenses.

The royalty paid to the Indian government by the new iron ore exporters being invited in, like Posco, is Rs27 rupees a tonne for iron ore lumps. That's all. 60 cents. Not even a dollar a tonne. The rest is, apparently, part of the whole loan-loan-loan and more loan cycle, since Posco will help develop the area. At every stage in this financial game, there is a transaction cost, and it is instead of being in percentage points, now into multiples of the costs involved.

Agreed, there is a cost involved in mining the iron ore, extracting it, and converting it into lumps, which even after allowing for all sorts of cost overruns is not going to exceed $20 a tonne-an extremely high outer estimate. Agreed there is a cost towards "developing" the area, whatever it means. Agreed, some babu somewhere can justify how after 35 years, our export price is down from $15 a tonne to 60 cents a tonne.

But can anybody justify why the Indian government, the state government, the various public sector entities, the watchdogs, the parliamentary committees, the environmentalists, the media, everybody and more-why can't we get even some percentage of the increase in iron ore prices to the country's account?

Assuming the price has gone up by $50 a tonne, all other costs remaining the same, shouldn't the nation get at least some part of it-especially when all we appear to be getting is 60 cents a tonne?

And that is why anybody who disagrees will be called a Maoist, a seditionist and an anti-national. But this article just wants to know-how much of the increased price will we in India get?

An aside: The same companies who bid for iron ore mines in India, also bid for iron ore mines elsewhere in the world. The higher costs being achieved make it feasible to prospect for and take iron ore out from all new areas. There are more than a few Indian companies in the running for this business, and the royalty that apparently some of them are willing to pay for "futures" is in the $100 plus levels-for future imports into India, when we become an iron ore scarce and deficit region. Already plans are being made to ensure that ports being developed under infrastructure loans are geared up to handle current export and future import of iron ore.

Monday, 23 May 2011

Capt. Prem Kumar, RAK AFRIKANA, and the Indian consul in Dubai . . .

Their strikes and demands are getting audacious but what Somali pirates, who continue to infest the Gulf of Aden, Arabian Sea and Indian Ocean, do to the hostages is terrifying. Sanjay Verma, India's consul general in Dubai, would know. For 11 months, he worked for the release of Seychelles-flagged RAK Afrikana, without telling anyone that his brother-in-law was the captain of the 23-member crew, 11 of who were Indians, held hostage by the pirates. He didn't think it was professional.


Read the rest of the article at the link provided.

Sunday, 15 May 2011

Jugal Purohit's blog on DG Shipping and the State of Affairs there . . .

This one by Jugal Purohit (of Times Now) is eminently readable . . .

On May 11, 2011, the Mumbai-based Director General (DG) Shipping, under fire for being unable to react effectively to the scourge of piracy affecting Indian men and waters, finally reacted as the agency issued an ’Order’ (available on the website: For an organisation, long seen as being on sedatives even by its own community of seafarers, this was a sizeable step. However, on closer analysis with various stakeholders, the verdict seems to echo the timeless phrase, ‘too little, too late’.

(Here;s the actual DGS order . . .

Saturday, 14 May 2011

Corruption in India and its relationship to shipping & banking

Much is being made about how Indian politicians and others are terribly correct. Spot on, here are some simple numbers and links:-

What we are really up against is here, this is the one-page synopsis, a longer link can be found through it:-

In absolutely brief bearimg + distance, in India, it took, after 1947 Independence:-

#  60 years to steal 210 billion dollars from 1948-2008.
# 3 years to steal another 260 billion dollars from 2008-2011.

Do you and I think this is only corrupt Indians doing this by themselves, that there is no connection between this and the vast number of international banks as well as, pertaining to us Indians, the huge number of ships involved in shipping activities in and around India - even coastal shipping - which are working through tax havens? Here's how the banks do it:-

How, however, do they do it in shipping? For that, over the last few days, my head is hurting reading the vast volumes of information on how rules and regulations at our very own Directorate General of Shipping aka DGS were nicely tweaked to favour shipowners operating from tax havens AGAINST shipowners operating Indian flag and even shipowners operating known flags of repute.

Fascinating. But if the Red Government can come to an end after 34 years in Kolkata, then how long does this survive in Mumbai??

SITREP: 06may'11 - Indian Government not to negotiate with Somali pirates . . .

Let us try and analyse this dispassionately, though this is difficult after hearing the first hand accounts as well as conveyed accounts of torture and worse onboard RAK AFRIKANA and ASPHALT VENTURE, especially aimed at Indian seafarers. So, some dispassionate observations:-

1)The main negotiator on the ground in Somalia, apparently handling over a dozen ships, is the by now famous "Ali". It has been reported variously that he is of Philipino origin, and travels frequently all over, including on flights that must by geographical fact over-fly India. One way of getting hold of this person. Ofcourse, the banks that are known to support him, as well as the insurance companies, are all also located in India - and it would take just one phone call from the Ministry of Finance or the Reserve Bank of India to have them report to the authorities in Delhi.

(Interesting side observation here - for decades now, DG Shipping has been directly party to supporting the business of shipowners and their cohorts operating through tax havens, by permitting care of type of addresses especially for FOC  ships on which Indian seafarers are sent through DG Shipping channels, using the RPS companies. This, in an observation made to me by a friend in the Finance part of things, is almost like one Government department encouraging tax evasion, and then coming back to the same Government for help when things obviously go wrong. So, investigation possible - who brought about this change, of permitting "care of" kind of untraceable addresses at DG Shipping??)

2) The Government has its stated position, of not negotiating with kidnappers, hijackers, terrorists - but this has been relaxed in the past and is likely to be relaxed in the future too. This will depend a lot on a variety of factors, not least of all the public and media support, which is currently in short supply but slowly building up. The agencies, owners and Government are on the other hand trying to stress to the families that they should not go to the media, with veiled insinuations of various sorts.

(The tactic of telling the seafarers, don't go to the media, is very one-sided and selfish. What the pirates have to do to their victims, they will do, and nothing will change things. The truth, however, has a bad habit of coming out slowly but steadily. And the truth is - psychological trauma from the moment the skiff comes into sight, explosives, AK47s, RPGs, magnetic mines on shipsides, mini-submarines with torpedoes, burning, beating, flaying of skin, cutting off of balls, locking into freezers, keel-hauling, drowning, leaving naked on steel decks, hung upside down, starvation . . .and worse)

3) There is absolutely no post-release de-brief, support, analysis or even database. The approach is the same as after any, say, railway accident - disperse the people, cover up, and if too severe, make a committee for an enquiry report which is of no use. Take a look at the MSC CHITRA / KHALIJA III report, for example.

(The reason for this is simple - any post episode enquiry will force accountability - who was responsible for sending Indian seafarers through official DG Shipping channels, on to these obviously unsafe and unseaworthy ships, not equipped to fight the pirates? It will also bring out the truths on how salaries were not paid, compensation not provided, families not permitted to enter DG Shipping offices, the works.)

4) The owners / agents are safe and secure with their 10000/- rupees per head limitation of liabilities. Salaries are paid if the P&I cover or K&R cover provides for it, which is not the case in more than half the ships currently under hijack, and this includes some that were sent through DG Shipping via RPS companies/agencies. The families, therefore, know this - and keep quiet because each month's allotment amount is like so much for them.

(I have over-heard the absolutely crude and impolite way in which certain agencies and companies speak when the families call up. Maybe it is the fault of the person who picks up the phone, but is it too much to expect that the direct numbers of a senior Designated Person for Families of distressed seafarers be provided, which does not have to go through Board lines and durbans and secretaries and chowkidars and people who have no idea or concern about what is going on?)

5) DG Shipping, the truth is that more than a few families have told me how they have not been able to go past the reception desk, in Jahaz Bhavan Mumbai. Many of us can well believe this. It is easier to meet Ministers and Politicians in Delhi, and surprisingly, they had to reach the office of the Minister of Shipping in Delhi before the DG Shipping condescended to meet them - in Delhi.

(Direct appeal to Mr. S.B Agnihotri - you appear to be fresh here in DG Shipping as DG Shipping - will you wait till Crime Branch of some Police does to DG Shipping what Delhi Police Crime Branch are doing to DGCA? It is lucky that DGS is in Mumbai and there is no office in Delhi - but fact remains, please clean things up.)

6) The larger issue, of impacting India's economy, is still wide open. And the even larger issue of how working closely with FOC ships registered in tax havens worldwide has worked against the interests of Indian flag shipping as well as Indian seafarers, is a scandal and a shame that must be exposed.

More soon.

Another view on helping people impacted by maritime piracy . . .

Re: MNOA/Chandigarh, seminar on maritime piracy

This has become a really long and interesting message set, in the course of the
night while I was away from the internet.

1) I personally do not support donations of any sort for attending conferences
or seminars. If the organisers want somebody that badly, then they pay. If the
person wants to say something that much, he pays. Day in and day out I am
invited to conferences in and around Delhi - corruption, environment, motoring,
media, the whole nine yards - and that has been the standard at the good ones -
and by and large, say what you want, most of these conferences evolve into
networking and co-opting functions. Reality is what people like Anna Hazare do,
everybody pays his own way.

2) The approach here is this - it is the value of the conference that is being
enhanced by the presence of the specific person with something to say. It is
also a cause that goes further if this cost is borne by the organisers.

3) If we have to make donations, then my sincere suggestion, request, advice, is
this:- please start with direct donations to the families of the people onboard
ships, that's my take on the subject. That is as far as looking behind, to help
those already in trouble, is concerned.

4) If we have to do something to fix things, looking ahead, then let us start
closer home, let us first of all openly accept the truths, with open house and
conference/seminar with our very own authorities. When was the last time DGS or
MoS or MUI or NUSI et al chose to hold a two-way dialogue with seafarers and
their families, anybody recall? After the Mangalore AIX crash, there was a
concentrated effort by some pilots and others to get into the whole rotten
aspects of aviation training and certification as well as other aspects of the
Indian aviation business - and the single point they focused was on the corrupt
core - DGCA. I am saying this here and have said it elsewhere - if we want to
fix things for looking ahead - let us get DGS in order. Call them to give
account. Let us fix the training colleges. But we won't do that because the
majority of seafarers ashore depend on this corrupt system to propagate their
own little feathered nests, right?

5) I know Capt. Choudhary quite well, and put it this way - he certainly has the
wherewithal to go for this conference on his own steam if he really wants to, as
he has expressed too. Very good man, and sincere - he went to Chandigarh on his
own steam and did something that most of us have not done - met with families of
piracy victims. Let us start by emulating him - I can help co-ordinate such
gatherings in Mumbai to start with - any takers? Maybe do it in the ballroom at
Seaman's Club, call the media, ask DGS, Shipping Office to send representatives?


So let us have a conference/seminar in India on matters pertaining to DGS. Let
us call not just the usual bunch of nodding heads waiting for lunch and evening
cocktails, let us call established speakers from investigation agencies, other
government departments, legal firms, tax specialists, families of seafarers
affected - and have them answer specific questions out in advance with people
from DGS present to counter the responses.

Let this conference/seminar be live on web, and let it be open to all. Let us
ask the YellowGate Police Station what THEY think about matters pertaining to
piracy, for example?

Today we have a regulatory body called the DGS who is not shy of attending
conferences and seminars everywhere else in the world - when did they last hold
one in India, a really good two-way one, on this subject?

I read day in and day out - of, we don't know who to deal with in the pirate's
lair. Oh, don't go to media. Oh, don't rock the boat. Oh, the shipping
agent/management company will cut off our monthly payments (as a few have done,
by the way, while the owners of these shipmanagement companies don't seem to be
suffering when they attend their CMMI meets in their luxury cars and gold decked
spouses . . .)

But I never hear from DGS for example, and maybe they should put it on their
website too:-

THIS is the agency responsible for such and such FOC flag, we are calling him
here to answer questions.

THIS is the real ship-owner we have issued him summons under our MSA/RP rules to
attend this enquiry.

THIS is the surveyor/inspector from our flag state who went onboard the ship and
said all is well but now the ship has sunk.

THIS is the shipmanager who did not provide proper anti-piracy measures on the
ship he sent people via RPS/DGS.

THIS is the person from DGS who placed a bond value of Rs 10000.oo per seafarer
onboard a foreign flag ship.

THIS is the Union official who has been in the seat for 30 years while
everywhere else terms are being restricted apropos IOA/CWG.

Tell you the truth, we can't even get our own DGS to reply to RTI Applications,
and have to drag them to CIC/Delhi for a response? (That's my own experience,
maybe DGS feels it is still, like INSA, fighting the Government of the day to
assist Indian shipowners - forgetting that the Government of the Day, for better
or for worse, is us?


Conferences and seminars are fine - but the real issue is at home with our own

And if we have spare money, may I, once again, suggest it goes straight to the
families? Start with asking MNOA/Chandigarh and SAILORS HELPLINE/Kochi, two
organisations which are doing just that, going down to the basics, to give us
names and addresses - and then just get up and send a money order, put the
money in the bank account number, send a cheque, send a parcel with clothes,
send whatever.


Humbly submitted.

Veeresh Malik

Wednesday, 11 May 2011

Flag of Convenience offices in India do not have diplomatic immunity . . .

It appears that the so-called self-acquired "diplomatic immunity" assumed by many of these Flag of Convenience/Open register companies and their offices issuing certificates, collecting payments and doing other documentation in India is being questioned rigorously by the authorities in Delhi.

That many of the people who in the past or present represent or consult with or even have stakes in these foreign FOC offices happen to be ex-seafarers who have spent time at various levels in the regulatory and other Government bodies is not escaping this investigation, too, seems they have even gone into the close relatives aspect too.

It starts with Panama, is what I am told, including their business of issuing equivalent certification of all sorts on a price-list.

Some effect of this passing of the buck on the piracy issue, I guess, will cause this corrupt core to crumble from within. I believe two close relatives have already "resigned" and one is going back to writing books, in a nutshell?

Friday, 6 May 2011

Will DG Shipping soon face the next DGCA kind of probe?

And why not, then, when the truth is known in every back-lane and side-lane near every port.

This article from today's MINT is self-explanatory:-

DGCA warns staff with kin in airlines

Regulator bars officers from taking decisions about carriers where their wards work to avoid conflict of interest.

Can we start thinking about whether the DG Shipping, Mr. Agnihtori, would consider implementing something like this at the DG Shipping and other allied offices, to start with?

Thursday, 5 May 2011

Prateek Rishi's story - a tribute to Capt. Prem Kumar of the RAK AFRIKANA

We all have a story. It is not only about where we came from, who or what our parents were, and what we or our families have become today.

But it often gets stuck there. That's OK, that's not our fault, but it is the fault of the day and age we live in.

Never mind. So, over the last few days, I've been digging deeper and deeper into the stories of people who were on the RAK AFRIKANA as well as the ASPHALT VENTURE. And I've received a fair number of telephone calls from people who I did not know before.

One, ofcourse, was a series of calls and eMails from the Big People at the Big House in Ballard Estate where it began for many of us, Directorate General of Shipping, DGS, Jahaz Bhavan. A few days after the demise of Captain Prem Kumar, and a few weeks after the big media circus on his return from the RAK AFRIKANA for which everybody from the Foreign Secretary to assorted politicians and union leaders and others took credit - they wanted to know where Prem's family lived so that they could condole.

Make what you want of this - but it just goes to show, there is no time or room for post episode debrief.  A seafarer dead and gone is a statistic. A seafarer who returns is an embarrassment. And one who returns and then dies is extra work.

I got quite a few other calls around the same time, in connection with the ASPHALT VENTURE, and what do I say - as one put it, if we had announced a cocktail party, hundreds of seafarers in and around Delhi would have made it, but to visit and offer simple moral support to the families of the ASPHALT VENTURE detainees - see DGS above, an embarrassment and extra work.

Private and quiet salutes to the few who did reach across, especially the wives, thank you SC, TC, RK, PM, RR, and RR . . . and others.

But the call that really brought me back to my story was one from Prateek Rishi, from far away New York, and I shall reproduce one of his eMails below. It says it all, and it gives me the strength to place my next post in a few hours from now, even at the risk of curdling my own future story.

See, I have reached a point where my memories of being at sea have become bigger than the dreams I have of my future. That's kind of dangerous, the next step would be senility. So,  spent over a year getting my old ticket re-validated, and getting ready to go backl to sea - and now, by taking DGS head-on, am risking all that again.

Fair and square, if Indian seafarers have gone on ships through RPS companies, then the responsibility is with the DG Shipping to ensure their safety. If, on the other hand, the DG Shipping made conditions so lax and unethical that RPS companies could send Indian seafarers onboard ships which were registered behind the usual "care-of" kind of tax-haven FOC addresses, then that was and is certainly DG Shipping's fault.

And that's where this is heading for next - even if I risk my return to sea, as people tell me I am doing. But then, I would not be doing justice to my story, on why I chucked up sailing decades ago, right?


If I were to sign on a contract of a foreign ship, I'd ask to see the anti-piracy measures the Company is taking, and how they are equipping their vessels that are going anyway near the South of Suez and the African East-Coast. The Shipowner/Charterer/Managers HAVE TO convince me with documentation, as to what measures would be taken when the vessel is hijacked and I am taken hostage and become a bait to torture. I'd simply like to see BAGS AND BAGS of money being handed over to my family for each form of torture I undergo, right from when that damn skiff comes within boarding distance of my ship and psychological torture begins. With each slapping, spitting, choking, pressure-point pushing, crushing, skin scalding, skin burning, burning of the balls, strangling, flogging, shoving, pushing, beatings, the money bags have to be flowing. The amount of money flowing to my family needs to be MUCH MORE than what the pirates are asking for. (By the way, all of the above torture methods were REPEATEDLY used on Capt. Prem Kumar.)

If this can not be done, then, weld some Automatic Weapons on the Port and Starboard Poop Deck and front of the accommodation bulkheads, under life-boats, and on the Focsle.

My 'Serang' will sew canvas covers for them and Cadets can stencil them. Put a freaking grease-nipple on it and my Mate will put it in his maintenance schedule. The guns should be on a separate electric circuit and firing should be controlled by the Ship's Authorized Users only. The guns should be Top four or 6 folks should be given the codes to open interlocks, load and fire the guns. The guns should be able to be panned and tilted and fired from the Bridge or Radio Room. CCTV should be able to show personnel around the guns and deck PA system to warn them of "Gunning Stations"!! Gun-sights should be interlocked with additional CCTV, remotely available to the Bridge, for targeting, aiming and firing.

I am asking for fixtures on the vessel that can not be carried around to settle a drunken brawl.
There should also be a couple of handguns in the Master's Safe.
These are active measures.

Passive measures would be having something like removable barbed, bladed, wire, installed along the ship's rail while at sea, or any other measures like high-voltage pulsating current, or whatever the design allows to afford active prevention of persons boarding the vessel.

Only then, would I sign on, onto a vessel!

It is EASY to fire a gun. Especially easy once you paint a picture of how you can be tortured when caught. Training for all this is easily available. Send a polite email to Somalia with a photo of the vessel. And then, "Bring 'em on!!"

I DON'T CARE, at this point, FOR THE CARGO, THE SHIP, THE CHARTERERS, THE SHIPOWNER, THE BANK, THE FLAG STATE, CLASS, LLOYDS, UNDERWRITERS, whatever. Any skiff coming within 50 yards of me and not declaring their intention, will be warned, my Owners/Charterers/Underwriters/Class etc. will be "informed", and threat will be awaited. I will be the first to fire - after reasons have been obtained and logged, and it has been determined (I determine, not the authorities sitting behind in front of a computer-screen!!) that firing was in the best interest of the Ship's crew and the vessel/cargo.

I'll die fighting, if need be. Not getting tortured. 

And remember those BIG payments to my wife ...

(It may all, then, be worth it!!)

Authorities don't have a consensus on the issue of piracy. The Bank, Shipowner and Charterers have their individual interests. Then there is somebody waiting for that crap that was made in China and is in that container, and somebody is waiting for his car to be offloaded so that he can drive it from the dealer and park it in his driveway. 

"Honey, I don't care for which car we drive or how much Chinese crap we have in our home! All I care for is seeing that you will be paid well enough in case I am not to come back, and that you'll be able to bring up our kids the way we had imagined. I know you'll need more than emails and phone-calls of condolences when I am gone. Flowers are not going to be enough to feed the family!!"

Aaah! Felt nice to write all the above!

For those who may worry about how I put bread on my table, rest assured, it has not been coming from Sea, since a long while now! Yeah! With an attitude like above, who'd offer me a contract, right?!!! However, I do have strong sentiments to the fraternity and really wish to see a sea-change in the Industry.

The community, as a whole, needs to do something together.

Really thinking, does it cost much to put 7 automatic guns on the vessel, and linking them to remotely aim and fire from the Bridge? At the going rate of approx. 3 Million dollars of ransom, plus the off-hire times, this retrofit, I can do for the Shipowner - for under 3 Million. Shipowners, are only playing the lotto by going in that area and hoping that their vessel will not get caught. Freight rates for that area have already been up by almost a couple of dollars per tonne. That covers CARGO - dumb, useless Coal, Iron Ore, Crude, etc. Nobody is talking of the Master - the one who'd get tortured, or his Crew!

Have a nice day, folks. Thanks for reading it through!

Thank you, Prateek, you put it better than I have been able to do in decades. And now, bring them on DGS . . . as we head towards something that will make the IOA, CWG and DGCA scams look like so much spray on deck. . .

The typical Flag of Convenience Shipowner's position on piracy and some answers . . .

Here are some lines that I have plucked from some typical shipowner / shipoperator / shipmanager dominated anti-piracy seminars, with some simple hard truths as many of us see them. Many of us who choose to take a wider view - why beat only the Goverment??


" It is astonishing and unacceptable that the shipping community has been left largely on its own to combat piratical attacks and to deal with their economic consequences. It is unacceptable because not only should we not tolerate crime at sea but also because we cannot be certain for how long the private insurance sector will be able to provide cover for the risk of piracy at sea for their Assured shipowners and cargo owners."

The typical FOC shipping community spoken about above has, for decades, chosen to evade taxation and all other forms of social responsibility including operating proper seaworthy ships, by hiding behind companies registered in tax-havens with minimal, if any, control or participation in the world community. Now that things are bad, the same people come crying, saying they want the governments they stole from to save them?


""Under the K&R cover, the main item of claim is the ransom payment and the incidental expenses (negotiation & delivery) up to the sum insured. Some K&R covers also include port expenses after the release of the vessel.""

Thank you very much. And the responsibility that anybody has towards the seafarer stuck onboard, if any, ends as soon as the ransom is paid. Hallejulah. And the devil take the hindmost.


""Complications will arise if cargo interests refuse to pay cargo’s proportion of GA on the grounds of a breach of contract by the Owners, e.g. for the failure of the carrier to exercise due diligence to provide a seaworthy ship. The issue has been discussed, for example, if the cargo interests allege that the carrier has failed to exercise due diligence to provide a seaworthy ship if he has not provided armed guards on board the vessel or if he has not taken appropriate steps to counter a piratical attack. The same argument would apply if cargo owners allege that any loss or damage to cargo was a result of the vessel’s unseaworthiness. e.g. as a result of the carriers failure to exercise due diligence to provide a seaworthy vessel if he has failed to employ armed guards or if he has failed to take appropriate steps to counter a piratical attack.""

So now you as a seafarer understand the basic fundamental - if your ship does not have armed guards, then complications shall certainly arise with all forms of P&I cover and/or other insurance covers.


""The position is different under American law which makes the payment of ransom illegal.""

Very interesting. In this day and age, that would mean any ship, owner, manager, master, crew, anybody who was involved in the pay-out of a ransom - has violated an American law. Think about this carefully the next time you fill out an application form for a US visa.


Indian Government's Official Position on Maritime Piracy

This is what our kachraa munceepaltee gormint has to say about what their position in context with piracy - you there now, drink your tulsi ka juice, sit in the corner, gormint munceepaltee of the Jahaz Bhavan chowkidar will not let you in but ALL IS WELL? Sorry for the hyperbole, but dealing with the human element of 3 separate sea piracy episodes, is enough to drive people round the bend. And worse.

""decided to "wait and watch" ""

Now I really know why Captain Ramdas K. Menon from the RAK ARIKANA / RAK SINDBAD world in Ras al Khaimah died. His heart literally broke when he heard about the truth. And I know why another very dear batchmate looks and sounds so tense all the time. And why these are some of the realities in connection with piracy, not really revealed . . .

#  balls being burnt off.
# legs being tied with your face in a gunny bag with rats inside being dipped head first into water and AK47s being fired around you.
# being tied naked into the freezer room (minus 17 degrees centigrade) and hung up with your hands behind you.
# fed only plain rice with no salt/veggies/daal anything for 11 months.
# being regularly sodomised or threatened with same.
# owner trying to skim off the insurance money for himself
# being left naked on hot steel decks face down while birds peck you
#  And then, come back to India, and die.
The chiefmost negotiator on the ground, wait for this, the famour "Ali" - is reporedly a Filipino. On to around 8-10 negotiations at any given time.
More than one release has been delayed because the various people in between have tried to skim off the insurance ransom pay-out.
Families of the ASPHALT VENTURE stranded and distressed officers yet not released have never been contacted by the DG Shipping, and more than once, were unable go up to meet anyone there.
And as for the late Capt. Prem Kumar of RAK AFRIKANA, bravest of the brave from 1980-81, his batchmates and he are proving once again the strength of the "batchmate bond" - which is confusing to some, but understood by a few.+
I have attended a few piracy seminars, and have now stopped going there, choosing to read up on the reports and papers circulated - as well as network separately. My own association with seafaring and the commercial as well as fiduciary elements of trade including especially shipping also extends to some work done in assisting and providing intelligence on the recovery of moveable stolen assets of any sort - especially when they cross international borders - automobiles is one of them.
But I have not been as shaken up as on hearing reports from seafarers, Indian seafarers, returned from piracy episodes, in my whole life, and I have seen some terrible things, like:-
# children trapped in a school-bus that went off a bridge and sank underwater in a river.
# college girls being burnt in a bus.
# a man being taken off a bus, beaten and burnt by a crowd.
# been at the New Delhi Railway Station when a post 1984 train came in.
# hangings after stonings in public.
# the trade in human body parts and foetuses
# bodies on the ground after massacre of "natives" in Laurenco du Marques.
Many of my friends will say -oh, don't even think of these things. But does that make them go away, does that give the government the right to say "wait and watch".
What can you do as a seafarer?
The option of a "strike" is laughable. Our same wait and watch Government will not think twice before declaring ESMA and arresting a few. In any case, are we united enough to do so?
What you can do, however, is this:- work only on ships where flag state provides you some element of safety. The larger issue with piracy is that it is mostly the FOC / tax haven registered kind of ships which are caught and where negotiations are pro-longed.
Next, simply avoid and refuse to sail in the affected waters, and if you must - then ensure that your conpany and ship's insurance and P&I provide ample cover. One piracy episode will probably spell an end to your maritime career. There are currently marine engineers and deck officers who returned or otherwise willingly working as cargo surveyors at salaries paid to tally clerks.
Make a noise. Join hands with the impacted families. Go to the nearest MMD and/or DGS office near you and organise regular protests. Enter into their daily routine with full legal clarity to  pose questions on their day to day activities. File RTI Applications of all sorts.
If you are ashore this and reading this, then start today - make your presence felt. Because otherwise, if you don't, then you too will become a statistic in the 'wait and watch' government of ours.


Wednesday, 4 May 2011

Latest status on motor tug JUPITER-6 at Supreme Court of India/Delhi

Kind courtesy Manoj Joy of Sailor's Helpline. . .

Dear ______

Latest development in the missing Jupiter-6 Case.

On April 29, 2011 the case of Jupiter-6 came up before Supreme Court of India. The legal team from Sailors Helpline was present in the court to assist the family members.  

As soon as the case was taken for hearing Honorable Justice Raveendran, made an observation regarding the plight of Indian seafarers in Somalia.

Justice Raveendran said, " This morning I read in the newspaper that more than 57 Indian seafarers are still under captive in Somalia. What is the government doing about the welfare of Indian seafarers".   

The government replied that they are in touch with various other countries to solve the crisis and they would file their reply before the next hearing.

From our side we have submitted detailed documents to the court with regard to various issues faced by the Indian seafarers. We have prayed for criminal action against the fly by night operating and shady recruiting firms.

During the hearing the court also directed the company to pay interim compensation to the Ukrainian nationals who were on board Jupiter-6, without any pre-condtions (i.e full and final settlement). In 2009 the court directed the Jupiter-6 owners to pay an interim compensation of USD 40,000 for officers and USD 25,000 for non-officers. The total compensation payable to the families will be determined by the court later.

The above amount was not paid to the families by the owners under some or the other pretext. Finally the court directed the owners to deposit the compensation amount in the Supreme Court. The family members will receive the amount from the court in a few days time.  The Jupiter-6, chief engineer,  son's both the kidney has got damaged and to transplant the kidney they are in urgent need to money.  We brought this matter to the notice of the court and the Honorable Judges have passed orders to pay them the compensation expeditiously.

During the previous hearing on March 28, 2011 the court directed the government to file  the status report with reference to the condition prevailing as on  date, particularly, to verify whether the amendments to SOLAS, RPS Rules and MLC Convention 2006 etc. have come into force and the effect thereof.

In this regard we too have compiled all the relevant materials pertaining to amendments to SOLAS, RPS Rules and MLC Convention 2006. We requested the court to grant us permission file these documents. The court in its order has permitted us to file the same. 

Warm regards
Sailors Helpline

Following is the Supreme Court order dated April 29, 2011.
SABEEHA FAIKAGE AND ORS.                                       Petitioner(s)


UNION OF INDIA & ORS.                                          Respondent(s)

(With appln(s) for impleadment)
(For final disposal)

Date: 29/04/2011    This Petition was called on for hearing today.


           UPON hearing counsel the Court made the following
                               O R D E R

                 Mr. H.P.Rawal,learned ASG submitted that he has received some of the information in regard to the current position regarding amendments to SOLAS, RPS Rules and MLC Convention 2006 etc. and also certain other information and hence seeks time to place them on record in the form of an affidavit.

             Mr. Rajiv Dutta, learned senior counsel stated that in so far as two Ukrainian sailors, their families have refused to accept the payment.Their refusal appears to be for the reason that payment was offered in full and final satisfaction. It is made clear that the payment may be offered ex-gratia and without a condition that it is in full and final satisfaction. If such an offer is made, we are sure that they will also receive the amount and have the benefit of the same.

             Learned counsel for the petitioner stated that one of the petitioner is in dire need of the amount and the Registrar (Judl.)may be requested to dispose of his claim expeditiously. If the concerned applicant
presents the application in the required form, we are sure that the Registrar Judl.) will dispose of the same expeditiously, preferably within one month.

             Petitioners are also directed to file documents with reference to SOLAS, RPS Rules and MLC Convention 2006 etc.

             List in the third week of July, 2011.


Additional non judiciary observations:-

# DGS apparently said that RPS and MSA have no penal provisions?
# DGS apparently said that they are terribly under-staffed.
# DGS apparently spotted having lunch with the owners.

The authorities have been looking at DGS with the same magnifying glass that they used for DGCA, and biggest question being asked is - how come DGS happily signs on documents pertaining to ship-owners whose addresses are in tax havens, when beneficiary owners are in other countries - are DGS conspiring against Indian Government in tax evasion issues now?

Tuesday, 3 May 2011

FOC ships, piracy, dear DGS, who or where is the real shipowner?

Very often, in cases involving Indian seafarers working on foreign flag ships, through RPS companies operating under DG Shipping auspices, the big question arises:- WHO is the real ship-owner? Leave alone fraud issues like fake class, absent P&I cover, lack of insurance, sub-standard rust buckets. The big question is nobody can answer - who is the real ship-owner?

The RPS company, more often than not like in the DGCA scams, are in some way or the other related or otherwise 'friendly" to people at DGS. Same old boy network, yeah, sure. Worked wonders for all of us.

But now our old boys are getting tortured, kidnapped, imprisoned and injured, maimed, even killed. Gone too far. Time to look around and put an end to this, time to fix the rot at DGS before a scam of the DGCA sort hits the ceiling, and media.

One set of simple solutions coming from a few people I spoke with, which is another thing - here in Delhi, the fear of DGS is so all-pervasive, that everybody wants to keep their identity hidden. But OK, so this is it, especially where the real owner can not be traced, and all sorts of other entities come in front:-

1) Indian flag ship wners are covered under MSA and can easily be held  traced and liable under Indian Law.
2) Issue arises in the case of foreign flag ships which are FOC and through RPS agencies where actual ownership is not known since front company is hidden in tax havens. This is absolutely illegal under Indian laws, for Indian entities to do business with entities who are hiding behind tax havens, and DGS complicity in this needs to be investigated. How is it that our own DGS extends some sort of recognition to companies which are often nothing more than suitcases and laptops hidden in secret offices in tax havens, have they not heard of people going to jail lately, for all this? Better ask around, Shri DG and NA, and soon.
3) But interim, for immediate relief, we need to demand for Indian seafarers working on foreign flag ships through RPS companies that DGS simply ceases some of these illegal practices and just complies with Indian laws to the maximum effect so that:-
a) All bank guarantees with RPS companies be increased to Rs 50 lakhs per seafarer instead of present Rs 10000.oo per seafarer. Alternately, a policy for value of Rs 50 lakhs per seafarer be made and deposited with DGS for the next of kin. This number is basis the amount of minimum insurance and under-writing for a junior Government functionary going to Afghanistan on deputation, by the way. Add to that pension and the rest of it.
b) #Where flag of vessel is same as nationality of owner of vessel, then full KYC guidelines as set down by Ministry of Finance be complied with, before permitting Indian seafarers onboard.
     #Where flag of vessel is different from nationality of owner of vessel, then full KYC guidelines as down by Ministry of Finance be complied with for both entities, before permitting Indian seafarers onboard.
c) A separate kidnap and ransom cover to be taken for each Indian seafarer to the value of USD .5 million SDRs for usage towards ransom payments.
d) A separate death and disability insurance cover to be taken for each indian seafarer to the value of full payments til the age of 65 or 10 years, whicher is longer, in case of death or disability due to piracy/kidnap.
Let us face it, DGS is not in a position to reconfirm the genuine-ness of P&I cover or documents of ships calling Indian ports, so trying to do so for ships trading exclusively abroad will be even tougher. Keep the added insurance in India, through Public Sector Insurance companies or GIC, all of us seafarers know that we are living and working in a dangerous profession with our eyes open - but please organise some protection for our families if we get kidnapped or fall afoul of pirates?

Captain Prem Kumar, TS Rajendra 1980-81, Master RAK AFRIKANA

Passed away in Delhi a few days ago due to accumulated effects of torture and stress caused in the course of a year under piracy off Somalia. Brave man survived by his braver wife and children.

Full report follows, subject to sensitivities of the family to be cleared first from family, and close batchmates.

Whatever, he got his ship's complement back home, safe and sound.

Captain Prem Kumar, aapko, topi uttaar. Up over there, my guru, Captain Ramdas K. Menon, who had immense faith in you and told me so, must be proud though sad, too.

How much more will we tolerate from an insensitive, corrupt and thoroughly compromised administration, which will not think twice about playing with lives also?

Today - all of us know atleast 2-3 people who will not go back to sea. Do we know what this means??