INTRODUCTION
The Indian Ports Act of 1908 was the first comprehensive law governing the operational aspects of Indian ports, imparting the role of the Central and State governments. The Indian Ports Bill, 2021, introduced on June 10, 2021, aiming to repeal and replace the 1908 Act, streamlining the current system of minor port administration, which is managed by State Governments and State Maritime Boards.
According to the Indian Constitution, ports are categorized as either major or minor. The Parliament has exclusive authority to legislate on matters concerning major ports. The Major Ports Authorities Act, under this provision, governs the regulating, operating, and planning of India’s Major Ports, which include 11 designated ports such as Chennai, Cochin, and Mumbai. All other ports fall under the Minor Ports category, and Entry 31 of List III (Concurrent List) grants both Parliament and state legislatures the power to legislate on them.
Efficient port infrastructure plays a crucial role in promoting international trade, highlighted by the surprising statistic that nearly 95% of India’s global trade volume is conducted via maritime routes. India has yet to fully exploit this advantage. Since the liberalization of the economy in 1991, Indian ports have undergone due development, however there is a longer bridge to gap with international counterparts in terms of efficiency and infrastructure.
OBJECTIVES OF THE BILL
According to the preamble, the purpose of this Bill is to:
- Consolidate and revise existing laws related to ports – focusing on safety, security, pollution prevention, and compliance with India’s maritime treaty obligations;
- Implement measures for the conservation of ports;
3.Establish State Maritime Boards with the authority to effectively manage non-major ports in India;
4.Create mechanisms for resolving port-related disputes;
And so on,
This blog will examine how the IPB, 2021 aims to meet these goals, as well as the effects on Indian Maritime sector.
SALIENT FEATURES OF THE INDIAN PORTS BILL, 2021
1. Operational and Procedural Requirements –
- Aligns with international regulations: International Ship and Port Facility Security Code, International Convention for Prevention of Pollution from Ships, and International Convention for Safety of Life at Sea.
- Chapter VIII: Updates and rationalizes safety and conservation rules from the 1908 Indian Ports Act.
- Chapter IX: Integrates ISPS Code and Safety of Life at Sea obligations into Indian law, enhancing clarity and reducing compliance costs for port operators. The Merchant Shipping Act, Directorate General of Shipping Circulars, and Rules enacted by various ports and port authorities all contain requirements outlined in this full for carrying out these objectives. This would facilitate compliance with these requirements and provide more clarity for all those involved.
- Pollution Prevention
- Chapter X: Incorporates Ballast Water Convention which aims to prevent aquatic species and pathogen spread as a step towards sustainable development and MARPOL provisions to manage ship-borne pollution.
- Introduces uniform standards across ports for pollution management, addressing current inconsistencies and easing compliance burdens rather than fulfilling different requirement of respective ports.
2. Establishment of State Maritime Councils – Chapter V recognizes and formalizes the existing State Maritime Boards in coastal states. Further it grants these Boards authority for planning, development, and maintenance of Minor Indian Ports. This chapter reinforces Boards’ responsibilities without altering their existing powers or functions under current laws.
3. Dispute Resolution Mechanism –Chapter VI provides for Section 21 granting State Maritime Boards the authority to resolve disputes involving themselves. However, disputes can be referred to arbitration if all parties agree. For Appeals, Section 22 allows the State Maritime Board’s decisions to the Adjudicatory Board established under Section 54 of the Major Ports Authorities Act, 2021. Pertaining to Adjudicatory Board’s Role, it can handle disputes between ports across different states, between State Maritime Boards, major and minor ports, or state governments.
4. Maritime State Development Councils –Chapter II creates the Maritime State Development Council, which now comprises Union and State Ministers concerned with ports and critical officials such as Joint Secretaries at ministries. The MSDC has dual roles:
i. Recommendatory: Provides policy advice to the Central and State Governments on matters relating to port regulations, competition, port efficiency and growth of the sector.
ii. Mandatory: Draws a national plan for major as well as minor ports, and co-ordinates with non-major port to build the association with major port and national plan.
While MSDC was established in 1997 for overarching port coordination this is likely to provide it with statutory status. Earlier the MSDC used to have representation from only Union and State Ministers but the new structure has included some central bureaucrats which is not liked by some state governments as it seems centralization of power. Section 83 states fines or imprisonment in case of non-compliance of MSDC direction which may disincentivize private investment in ports. Section 17 empowers Centre to dissolve non-functional port if it is not included in the National transportation plan which has been highly criticized by state government for centralizing the power. Some of the states, especially Kerala, Maharashtra and Odisha have least favoured this centralization arguing that it creates another bureaucratic layer that may slow port management and developmental projects. A better approach could be to try to bring a balance between the regional and central interest just like in the case of the GST council.
CHALLENGES IN THE INDIAN PORTS BILL, 2021
The draft Bill has sparked controversy the MSDC was initially designed as an advisory body. Its purpose was to coordinate the development of both major and non-major ports, with secretarial support from the Ministry of Shipping. However, in the 24 years since its creation, the MSDC has only met 17 times—highlighting a lack of regular engagement in its original advisory role.
The new Bill proposal to make the MSDC a permanent body, gives it significant new powers. Among this, is the authority to draft and implement a National Plan for the development of all Indian Ports. This plan published in the Official Gazette and is updated periodically. The MSDC would also be responsible for ensuring that non-major ports grow in harmony with major ones, and if any port fails to comply with the National Plan, the MSDC would have the power to launch an inquiry.
What has raised eyebrows, however, are the strict penalties laid out in Section 83 of the Bill. These include hefty fines—up to ₹1,00,000—for basic administrative errors, such as failing to provide requested information or accounting records when directed by the MSDC. The Bill is setting a reckless precedent of criminalising basic mistakes in administration among the people and allowing absolute powers to those in charge.
One notable omission from the Bill is a clear dispute resolution mechanism. Neither the Act of 1908 nor the State Maritime Board Trust Act includes any similar provisions. While the Bill excludes arbitration—which could be seen as a positive step—it leaves room for potential conflicts of interest. For instance, the State Maritime Board could find itself adjudicating disputes in which it is a party, raising concerns about impartiality. Furthermore, the vague language used in the Bill could encroach on the jurisdiction of the Supreme Court, leading to potential challenges on constitutional grounds if these issues are not addressed
CONCLUSION
Earlier the legislation related to the Indian Ports was named The Indian Ports Act, 1908 which itself lacked in many modern aspects and required a total revamping. India’s commitments under different Conventions which are part of International Maritime Law, required to be codified in the Statute mechanism so as to observe its tenets. It is in the above chapters that the draft Bill seeks to provide legal framework for safety and security of ports in chapter IX while chapter X in as far as prevention and containment of pollution within ports is concerned. These provisions will be made applicable at ports all across India including Major ports or Non-Major ports and whether it is a port owned by the government or privately. Each port is required to develop a ‘security plan’ and a ‘waste reception and handling plan’ and is to be necessarily ‘audited’ periodically by the Central Government. These provisions constitute what can be termed as ‘good regulation’, but they should not be applying to the bulk of Non-Major Ports, which are in fact, small fishing harbours that do not deal with international vessels.
While it’s admirable that the proposed new code incorporates international best practices in port operations and management, certain provisions in the Bill need a closer look and some rethinking. Globally, port management is moving toward decentralization, allowing for more local control and flexibility. However, this Bill seems to lean in the opposite direction, concentrating too much power with the Union Government. This centralization could potentially slow down infrastructure development and discourage private investment in the sector.
To avoid these pitfalls, it would be wise to amend the Bill so that the Maritime State Development Council (MSDC) remains a policy advisory body, staying true to its original purpose. This approach would help ensure a unified and inclusive national port policy, better addressing the diverse needs of regions across the country.
Author(s) Name: Niharika Singh (National Law University, Odisha)
