News24

Lack of ships flying SA flag costs billions

2012-03-19 22:36

Durban - South Africa's failure to have any ships flying the country's flag was costing the country about R37bn a year, Transport Minister Sibusiso Ndebele said on Monday.

He said in Durban that of the 200 million tons of freight that left South African ports in 2009, not a single ton was carried by a ship bearing the South African flag.

"Sadly today, our country cannot claim to have prioritised this [maritime] sector," he said.

"All of the 200 million tons of our trade are carried by foreign-flagged ships, costing the South African economy in excess of R37bn per year," said Ndebele.

Maritime law dictates that ships have to be registered with a country and fly that country's flag.

However, many ship owners fly a flag of convenience. A flag of convenience ship is one that flies the flag of a country other than the country of ownership.

Cheap registration fees, low or no taxes and freedom to employ cheap labour are, according to the International Transport Workers Federation, the motivating factors behind a ship owner's decision to fly flags of convenience.

Countries that have cheap registration fees are Panama, Liberia and the Marshall Islands.

Ndebele said that 80% of the country's trade was by sea and therefore it was a necessity to prioritise the maritime industry.

Ndebele said South Africa was in the top 15 shipping countries in the world when it came to the tonnage that was transported to and from its ports.

Comments
  • Piet - 2012-03-19 22:45

    I bet that the taxes to register a ship in SA is one of the biggest factors...

      John - 2012-03-19 22:51

      Exactly....Sibusiso Ndebele discovered the biggest true in business.

      Piet - 2012-03-19 23:04

      37 billion in taxes!

      Werner - 2012-03-20 05:06

      I smell a tender for the purchase of cargo ships in the ANC's near future.... and that is going to cost us even more.

      Helmut - 2012-03-20 06:38

      With his distorted logic bra Sbu is probably planning to make it compulsory for ships using South African harbours to be registered in South Africa! That would be another step to get the country closer to ruin!

      Erich - 2012-03-20 07:09

      Like ACASA's exhorbitant fees.

      Dennis - 2012-03-20 07:15

      We had SAFMARINE but the ANC sold it off !! Veri kleva Minister Sibusiso Ndebele !!!

      Peter - 2012-03-20 08:03

      That's not such a big loss Mr. Minister? You and your ANC cadres steal about that much every year don't you? Hmmmmmmmm ???? So .... by your own logic .... seeing you see this as a big loss to the country, you and your ANC cadres are even a bigger LOSS.

      Sheda - 2012-03-20 08:27

      No. They are waiting for a foreiner (or local colonialist) to start one up. Then they can sit back and tax and unionise and complain.

      Gestoffle - 2012-03-20 09:26

      I don't know the entire story...perhaps somebody knows more.... I have reason to believe that some of it has to do with liability and prosecution. i.e. If a ship is registered in a more protected country, I understand there is more leniency. Just remember, for example, a cargo ship can spill it's bunker oil and there is enough to ruin an environment.

      Ian - 2012-03-20 10:08

      Hau! waat heppen??? There were plenty back in the day of the mhlunghu, did they sink? or did they go to 'aangaaze' ( missing)!

      Fussed - 2012-03-20 10:11

      Are you mad Do you think the shipping companys want to be linked to the biggest corrupt gov in the world

      Danie - 2012-03-20 21:30

      Another fact, many shi[s have to make use of the Panama Canal, If they are a Panama registered vessel, there fees are less. I f I could fly the Us flags and pay what they pay for new cars I would also do it...

  • Glyn - 2012-03-19 22:46

    When Safmarine was sold to foreigners it was a national catastrophe! Time SA got some ships. We have the talent but BEE is getting in the way of a viable shipping company.

      Tarryn - 2012-03-19 23:20

      Duncan BEE is costing this country millions. In the ideal setting if 2 people apply to do a certain job and are more or less equal in skills etc then the black guy should get the job and if there isn't a black guy applying or the white bloke has superior skills etc only then he should get the job. In this country what is happening is the black guy who applies is far inferior and unable to do the job but is given the job anyway irrespective the cost it brings in the job not getting done due to him just not being capable or option B only a white guy applies and no blacks apply and they decide they'll rather offer no service than have a service by whites even though no blacks applied. That is costing this country billions.. in this case 37bn. So bee in this case costs 37bn in tax and possible employment opportunities that come with giving the job to the whitey. You might try defend this application of bee but tell that to the 1000's of people who could've been employed in that industry who now sit without work cos that white bloke flies his flag for another country and does the job anyway except the profits go elsewhere. This is happening in just about every industry.

      Tarryn - 2012-03-19 23:22

      BEE is blocking me in doing business so I'm in the process of taking your advice and going elsewhere where there is no BEE.. except the 86 people I employ directly here currently are now losing there jobs and I'll employ that number in another country's economy

      Francois - 2012-03-19 23:30

      Ai tog Duncan, the point that Ndebele is making is that SA does not have favourable incentives for shipping or favourable terms and that is why carriers choose other countries. Now whether those terms include BEE or not actualy can only make up part of the cost as the labour on deck is governed by the ships country of registration - thus in exactly the same way that Cosatu and the ANCYL chooses where to have its T shirts manufactured. I don't think that it is BEE per se that is causing it, but SA's labour laws which is in fact the smartest form of BEE. Duncan if someone does not like BEE, he is entitled to state his opinion just as you are, but to condemn him to another country on the basis that he has a right to do so, may border hate speech. It will not solve the problem that Ndebele has stated. Glyn in Ireland (just to name a country) will not mean one more ship flying the SA flag, but the abolishment of unflexible labour laws will. Thus GLyn is actually giving advice to the minister, and you Duncan, you act like the old Conservative Party that wanted to chase all non whites into the sea - fortunately the NP did not allow them on the beach, what is stopping you, Duncan?

      Piet - 2012-03-19 23:38

      Bee is a bottomless pit.....

      Keegan Vaughn Bizaaré - 2012-03-19 23:39

      I am not saying BEE is wrong...as with most things it has it's pro's and cons. However BEE is taking its toll in the shipping industry. I know this first hand as I am involved directly with the shipping industry. I am a Navigating officer on cargo ships. I am at sea at the moment, I work for a German shipping line which normally has a ship calling at a south african port every 2-3 days. Our ships are registered in the Marshall Islands, Gibralter and Singapore, high taxes is definitly a contribution to our German owner not flying the flag of SA, another detrimental reason for not flying SA flags is due to BEE. Our owner refuses to fly the flag of South Africa as he wants nothing to do with a country that fast tracks individuals in the Maritime sector, selecting an inexperienced accountant for a job beacause he or she is black is one thing, they can make mistakes and no ones lives will be lost, however in the maritime sector lives will be lost because of an inexperienced individual being given a job for a position that they are not quailified for. For example, myself(having a couple years experience as an officer as well as other captains I know with 20 years experience at sea cannot get jobs as pilots in SA ports, instead due to BEE young males and females are getting these highly paid and technical jobs that requires experience. They become pilots bringing huge ships costing millions into SA ports and yet some of them have only 12-15months experience at sea not even sailing as an officer!!!!! But only a training officer. Since calling at SA ports I have had 3 experiences in just as many years where my captains have taken over control of the vessel due to the pilot making mistakes, giving orders that would lead to dangerous situations etc due to the lack of experience of the pilot. About 3 weeks ago I was in Durban and one of our other ships from North America came and off loaded bulk cargo, due to the way she is built she had to change to having her Port side alongside instead of her starboard, in laymans terms she had to turn around. They took the pilot onboard, connected the tugs and the procedure ended 45min later. For that 45min it cost our company 55 thousand rand to utilise the pilot and tugs, so surely if owners of ships are paying such huhe amounts they deserve to have the best pilots around. Don't get me wrong, I'm not saying that all the pilots are bad, but there are those that have got these positions that simply can't do the job, that's unacceptable and is one of the main reasons shipping owners will have nothing to do in terms of flying SA flags. I'm afriad until there are drastic changes SA will lose huge bucks, at the end of the day South Africans are paying for it through tax.

      Perfume - 2012-03-20 07:46

      @Navigation Officer Keegan quote " I was in Durban and one of our other ships from North America came and off loaded bulk cargo, due to the way she is built she had to change to having her Port side alongside instead of her starboard" unquote - do they even understand this Maritime term. Excellent points you have made in your comment.

      Slick - 2012-03-20 09:21

      As a old SEADOG.There where many other Lines operating under RSA Flag. The Maritime Industry in the RSA was in and still is in the doldrums for over 30 years at least. The costs local operators where expected to pay where just to expensive as well. Damn the docking fees and delays in SA ports are just as ludicrous. I wouldn't get back into shipping in the RSA if the Govt gave me the ships. Its also too expensive to run Ships out of South Africa as we simply too far away from the modern world to make it viable. Never mind all the Labour issues etc etc..LOL! Ndebele has to be the dumbest Transport Minister the RSA has ever had. If you want a ship go to Greece and Italy and similar countries, there are 100's available for sale. There are many advantages to unscrupulous operators flying flags of convenience. Take the Ship that washed ashore on the Beach at Salt Rock Kzn recently to prove the point.

  • Bennie - 2012-03-19 22:46

    I have seen a Makorro with a zambia flag on once !!!

  • Bennie - 2012-03-19 22:49

    Dear Mr Ndebele , Dude if you want nice things and grandeur you need to work . Work meaning do something usefull and with purpose , going beyond 9-5 . No peace job, striking , go slow m-kay !!

  • Quentin - 2012-03-19 23:03

    Cheap registration fees, low or no taxes and freedom to employ cheap labour are, according to the International Transport Workers Federation, the motivating factors behind a ship owner's decision to fly flags of convenience.(READ OVER AND OVER - TILL IT SINKS IN)

      Glyn - 2012-03-19 23:14

      Right Quentin. Also there is no BEE apartheid on ships, they employ people of all races at sea. Shipping companies must be sharp to survive and the additional economic burden of BEE would kill them in minutes!

      Andrew - 2012-03-20 10:10

      Dont forget the labourers are there by their own choice.

  • Koos - 2012-03-20 00:44

    This bunch of clowns are looking everywhere to fill up the piggy bank as the current one is starting to run low.

  • Andre - 2012-03-20 03:03

    The article does not go very far as there is a draft document on 'Shipping in South Africa' from 2008 drafted by the government available online. http://www.treasury.gov.za/public%20comments/Tonnage%20tax%20discussion.pdf Note: 1.1 Only one vessel currently remains on the South African ship register, which is used for international trade. This is a far cry from the 52 vessels which were once registered dating back to the 1970’s. Now the funny thing about that paragraph is what it continues to say showing that the South African government thinks that business is there to create jobs, not profit. The communist mindset is a big worry. 1.1 (Cont) vessels, regularly call at South African ports ...all these vessels are foreign owned....they do not contribute in creating wealth for South Africa....This represents an opportunity cost for South Africa, because if those vessels were registered in the Republic, and carried its flag, they would contribute to wealth creation in the country. An important factor that contributed to the decline in the number of ships registered is the relatively unattractive business environment South Africa offers the shipping industry. Need I say more.

      Wilma Crous - 2012-03-20 06:12

      Informative thx. SA becoming an import country, where we used to be an export country ...

      Koos - 2012-03-20 06:18

      Interesting read. The bottom line is that SA tax and labour laws are not up there where it should be if you want the bark with the big boys. Imagine our union boys burning the ship when they are not happy with their meals. Cosatu will be very unhappy if pre test for Aids are done.

      Nigel - 2012-03-20 07:44

      the bottom-line is that South Africa (ANC Govt.) is not business focussed & seems to think that it is entitled to its share of commerce & investment , without doing a thing to attract it, if fact doing the opposite by implementing unfair & unattractive & unproductive labour practices. Its a combination of incompetence, arrogance & derelict of duty (laziness) ....at the end of the day jobs are not created, taxes are lost & business opportunities go elsewhere while the ANC cadres live the lives of kings.

      Oliver - 2012-03-22 13:12

      actually the ONE remaining vessel is about to or has already been decommissioned.... so there are NONE.

  • Pierre - 2012-03-20 03:55

    I don't think its so much a BEE thing as a labour law thing. Running a ship under SA law is almost impossible! The labour law does not take into account an industry where workers are at the workplace 24/7 for weeks or months on end and where they work up to 12 hours/day for the same period of time. So everything has to be done by exemption, which is time consuming and expensive.

      Gungets - 2012-03-20 05:46

      Finally, someone who goes beyond emotion. BEE sometimes causes the wrong people to get the job. Our Labour Laws, with their socialist goals, are the real issue. They are supposed to improve the working conditions of labour, instead they make people unemployable.

  • Nyiko Ngobeni - 2012-03-20 05:21

    So why don't you create incentives for ships to register here now that you know?

      Garth - 2012-03-20 06:33

      Because Nyiko, as pointed out by many informed people above your post, the useless, worthless anc has placed too many obstacles in the paths of investors.

  • Tony - 2012-03-20 06:29

    Those same ships import cheap sh1t from the East, and reduce employment locally. If they didn't and we wanted, then, to employ locals, they would no doubt strike for higher wages, call the ship owner a capitalist, demand to nationalize the boat and then burn it in protest. Back to those foreign ships bringing in cheap sh1t.

  • Pierre - 2012-03-20 06:44

    Unfortunately it is not just the present government that has neglected shipping. The previous government was almost as bad. Unfortunately our rulers are essentially landlubbers, who don't appreciate the sea. A former Chief of the Navy summed it up like this. "South Africa has only one maritime hero.......and he rode a horse!"

      Ze Don - 2012-03-20 07:27

      Ummm... Let's think this through: Under apartheid, sanctions were enforced on SA. Therefore a ship flying a SA flag would not have been welcome in most ports. So you can't lay the blame on the previous regime.

      Akili - 2012-03-20 07:47

      Ze Don: Get some coffee and read your comment again. What are you saying there, the reason they could not fly the SA flags?

      Gungets - 2012-03-20 21:50

      I am with Akii - the previous regime were their own enemies. They caused the excommunication from the world with their policies - therefore they caused the demise of our fleet. Logic is a b#tch.

      Pierre - 2012-03-21 07:06

      Ze Don is right, up to a point! I have been involved in the sea one way or another since I was 16. Government policies just basically ignored the sea. The Nats did create Safmarine, but it succeeded almost despite the government. There was never any real comprehension of the importance of maritime trade to the country.

  • Leon - 2012-03-20 06:46

    South Africa's political polocies are the main factors. The business community is scared of a communist regime. Especially when nationalization comes up and the government taking farms from farmers. What do you expect.

  • Bertus Pretorius - 2012-03-20 06:59

    It amazes when our government only sees the problem when there's almost nothing left to save (see our water situation and current electricity fiasco).

      Peter - 2012-03-20 08:16

      Thank you Bertus --- I was beginning to think I was the only sod who noticed this!

  • Michael White - 2012-03-20 07:03

    We have one on the beach here in Cape Town!! Its ours now!! Maybe we could lure a couple more in?

  • harley1 - 2012-03-20 07:13

    they are just looking for more money to steal from the gravy boats next it will be BEE Boating Economic Extortion .

  • raymond.kok3 - 2012-03-20 07:20

    we are even going to loose out more in our agriculture sector as well soon we will have to import our vegatables so mr minister please give these companies incentives to register here and smooth the path to better economic opertunities and please no tender buddies

  • Kuno - 2012-03-20 07:27

    R37bn a year... just a bit more than our beloved government wasted last year. Can't see the problem. less corruption and bribes and we would have the money available.

  • Nigel - 2012-03-20 07:35

    Ok so what is your plan of action, or is this just an observation & more talk & no do

  • Blane - 2012-03-20 07:39

    Why does'nt the anc start its own shipping line , call it perhaps The White Star Line ?

  • Mark - 2012-03-20 07:42

    If you think this is such a beeg problem then buy yourself a couple of ships. Don't tell us about your problems, you're there to create solutions.

  • Perfume - 2012-03-20 07:44

    BEE + UNIONS + GOVERNMENT = not going to happen. How many skilled Maritime staff are there in SA that are employed under the "BEE' flag???

      Keegan Vaughn Bizaaré - 2012-03-20 23:23

      Transnet ports and Smit Amandla are the only two maritime companies that use navigational offices, engineers and captain on vessels that adhere BEE requirements.

  • Adrian - 2012-03-20 07:54

    I suppose reporting it the other way (which is probably more accurate) would have been out the question .. Shipping companies SAVE over R 50 Billion in taxes by registering vessels in other countries !!

  • larry.piggott1 - 2012-03-20 08:02

    Ship owners have an aversion to being told who they must employ and who must be the captain.

  • Spikes - 2012-03-20 08:05

    The question that should be asked is why SAFMARINE was sold off! And where THAT income went to?

  • Fanie - 2012-03-20 08:06

    at the rate we are losing R30 billion at a time - a figure that has popped up very often in recent times, we could have paid for the Gauteng road disaster, repaired the rest...., reduction in fuel levy....

  • Jo - 2012-03-20 08:08

    Good comment from the minister. Most African countries are being ripped by the traditional see transporters. All SA resources must be shipped by SA ships. Wake up and claim your values SA otherwise others will just make money out of your recources including shipping them out adding value and shipping them back to you! What a world like no win.

  • Hugh - 2012-03-20 08:13

    Like Anglo american moving opperations off shore Safmarine have done the same. A cas of NO TRUST. A small detail in the overall scheme of things but then has government shown it can be trusted?

  • Ze Don - 2012-03-20 08:31

    @Akili: You can't blame the previous regime for not developing a industry that would have been useless at the time. You can however blame the current government for killing entire industries take ISCOR & textiles as examples.

      Gungets - 2012-03-20 21:53

      Try and stay on the subject. We had no shipping then because government policy made it impossible. We have no shipping now because government policy is making it impossible. I see no difference in effect, just in method.

  • Doug - 2012-03-20 08:35

    Just the ANC looking for another Tax Gravy Train from the White Man......

  • Deon - 2012-03-20 08:37

    Why not get SANTACO in the shipping line as well. They can overload ships as well and increase profits

  • Goose - 2012-03-20 08:38

    You guys keep missing the main point. Africa is the same, whichever country you go to. There is an excuse in every African country you go to from Apartheid to colonization to wars to famine to pestilence etc etc. Separate development is the only way to get a decent quality of living back. A separate piece of land where the minority can start again. The masses have not changed in thousands of years and will not change in the forseeable future. I think it is a culture thing...what else can it be? You can throw a Trillion dollars at any African country and in a year that money will have disappeared down a black hole(pun intended). Sorry, it is just a fact of life. Simple observation of history.

  • swavka - 2012-03-20 08:40

    Cash cow drying up - have to find new ways to line the politicians pockets, amazing how they have literally stuffed up a whole nation in such a short time (2009 - 2012)well they have proved that they are number one in Africa where that is concerned. Give yourselves a pat on the back and say well done!

  • michael.liebenberg - 2012-03-20 08:46

    It is interesting how people comment on this issue and missing the point completely. The co called "taxes" everyone is referring to are fees for the registration, admin, mandatory and regulatory inspection and more. I myself work for a well known shipping company with 42 ships at sea.. Our head office is based in Miami, and all our ships are Bahamian flagged. When a ship is flagged in a country, it means that the ship must adhere to the local maritime rules. In our case, SAMSA. I have dealt with SAMSA before for my international license, and there is absolutely nothing wrong with them. As for the BEE stuff... hmmm . Any ship in the world, no matter what flag state, is subject to the rules of IMO (International Maritime Organization), ILO (International Labour Organization), and SOLAS (Safety of Life at Sea) Shipping companies will not bow to the local laws about employment, but rather to IMO. In our case, Americans working on our vessels, get no preferential treatment, and there is no law that stipulate that your have to employ certain races, gender, etc. If we do get ships flagged in SA, and our government tries the BEE or AA card, the ship owner will simply move the vessel to another flag, as simple as that. We should rather look into why no one wants to register their ships here. Maybe the taxes are too high or something else?

      Perfume - 2012-03-20 10:27

      Port Dues in Durban are way too high, I don't know what the other Ports charge.

      TaniaSandraSteyn - 2012-03-21 00:32

      I know very little of the Industry, but your comment is a beacon of light. Red tape again, or high fees? As in ACSA killing the airlines with their taxes, plus the fuel taxes? I saw that happening 10 years ago. No Airline in SA can survive with all the surcharges riding on their backs. Pretty much in the same league as the SA tax payer.

  • Grant - 2012-03-20 09:24

    The figure of R37 billion seems too high if it's just for taxes. I wish there was a breakdown. Does anybody know why Safmarine was sold off?

  • Rob - 2012-03-20 09:30

    Now watch the space....see how long it is before we see another anc gravy train opening up!

  • ludlowdj - 2012-03-20 09:30

    Not many ship owners are stupid enough to register their ships here, it is cheaper and easier to do so overseas.

  • Mike - 2012-03-20 09:31

    How about e-toll? Instead we call it sea-toll, that way govenrment can pay for re-surfacing the ocean(i bet the anc will claim they did that, seeing as they like pulling blasphumous christian references into everything) and any foreign ship that doesnt pay will get impounded for six months, the captain imprisoned for six months and the cargo on the ship used for the next anc party to celebrate their victory over western shipping companies. Sounds like a plan?

  • DarrenCooper68 - 2012-03-20 10:15

    Wow, lets all accept for arguements sake that BEE, Corruption, Nepotism, Racism and every other conceiveable "ism" is rampant in SA. Now with that out of the way, are there any other meaningfull, perhaps even constructive opinions out there on any topic, in any forum...

      sean.redmond3 - 2012-03-20 11:12

      I doubt it, but the comments are fun to read.

  • Joe - 2012-03-20 12:40

    This crazy government of ours has a strange way of doing things. First make sure that its totally broken beyond repair, then cry about it, then fix it at the highest possible cost, ensuring at all times that the “comrades” benefit from every cent gets spent..! WoW... and still the stupid masses vote for them...unbelievable..! We had SAFMARINE, UNICORN, whatever else. Where has it all gone..? Well Mr Zuma, it’s all gone now, you can start again from the very beginning, and just as a joke, let’s see just how many seamen you can recruit from our pathetic navy, which, if you be absolutely honest, is totally Fu..t, Everything is fu..t , the whole country is fu..t, the traffic cops, the police, army navy, air force...all fu..t. So, why not call up you palls in China, ask them to pop over here, bring a coupla ships and some cranes and stuff with them, swop them for half the country..like the rest of your friends in Africa are doing...why be any different..problem solved..easy hey..? So, what’s next to moan about..?

      PeggySven - 2012-03-20 14:52

      Joe it is all FUBAR, the CancER's legacy to the people of South Africa

  • jim.dickson2 - 2012-03-20 15:14

    Where are Safmarine's ships registered?

  • NotBlackEnough - 2012-03-20 15:43

    Dear JZ/ Mr Prez, This MINISTER must be the DUMBEST IDIOT in your cabinet. He has been in this Job for how long? Not long enough, i presume. And only now he has woken up? Does he even know we have Harbours? Seems he is too busy with Speed Limits & Toll Fees? Maybe missing his Merc S Class that was a FREEBIE from KZN Businessmen? I do not actually have a problem with SBU. I am looking for the Ass.H..E that appointed him. I Rest My Case.

  • neilza - 2012-03-20 18:10

    south africa will prob charge triple the panama or liberia rates. But also surely the R37 billion is made up in port charges and customs and excise. After all i paid R400 import taxes and duties on a R600 clothing purchase from australia

  • Brian - 2012-03-20 18:13

    SA has ships of war only, bought at inflated prices, in a country with no enemies, why have we warships, they do not pay tax, we pay tax.

  • Hugo - 2012-03-20 19:09

    So MR Transport minister, how about doing something about attracting some ships to the SA register...If you want to attract the business, you need to make the SA flag a viable alternative to other flags. Give the only remaining South African shipping company (Unicorn) some incentives to flag their ships in South Africa...

  • Johnny - 2012-03-20 21:59

    The red-tape and cost involved in registering a business or even something as a motor vehicle is mind-numbing, can you imagine what it would be like to register a ship?

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