• Issues loom over withdrawal of Extraordinary Gazette No. 2041/10 
• Hands tied as SC decided on withdrawal: Port Ministry 
• Ministry issued new gazette in 2022: Shippers 

The Ministry of Ports, Shipping, and Aviation, responding to the recent criticism against its decision to rescind the Shipping Agents, Freight Forwarders, Non-Vessel Operating Common Carriers and Container Operators (Structure of Charges) Regulations 2017, claimed that the decision was made pursuant to a recent Supreme Court judgement.

Speaking to The Sunday Morning Business, Ministry of Ports, Shipping, and Aviation Secretary K.D.S. Ruwanchandra stated that the ministry’s hands were tied and that it had no option but to rescind the 2017 regulations published in Extraordinary Gazette No. 2041/10 of 17 October 2017 as a consequence of the recent decision made by the Supreme Court in the Special Determination on the bill titled Licensing of Shipping Agents, Freight Forwarders, Non-Vessel Operating Common Carriers, and Container Operators (Amendment) Bill.

“The Supreme Court decided that the Minister has no authority to issue gazettes regarding licences and charges,” he stated.

However, these assertions were vehemently denied by Sri Lanka Shippers’ Council Chairman Russell Juriansz who, speaking to The Sunday Morning Business, stated that in terms of the Supreme Court decision, the Minister had no power to make regulations to declare the charges to be levied in the shipping trade and that it had no relevance to the Extraordinary Gazette No. 2041/10. 

“The Minister published a gazette on 22 October 2022 (Gazette No. 2302/24), where he said that the delivery order charge should be Rs. 20,000 and introduced a cost recovery charge of $ 8 per cubic metre. However, he later realised that he did not have the authority to issue this gazette. 

“Therefore, he introduced another gazette to amend the Licensing of Shipping Agents, Freight Forwarders, Non-Vessel Operating Common Carriers and Container Operators Act No. 10 of 1972 to grant him the necessary powers to introduce the above-mentioned charges. It was this amendment of the 1972 Act that was challenged before the Supreme Court. 

“According to the Supreme Court judgement which was read in the Parliament, the Minister has no authority to decide on the prices in the trade. Therefore, he had to rescind the gazette published on 22 October 2022,” Juriansz stated.

Juriansz pointed out that the Minister had been required to rescind only the Extraordinary Gazette No. 2302/24 of 20 October 2022 in terms of the Supreme Court decision. Instead, the Minister had, under the guise of rescinding the Extraordinary Gazette No. 2302/24, also rescinded the Extraordinary Gazette No. 2041/10 of 17 October 2017, which contained the 2017 regulations.    

The 2017 regulations provided that the cost of carriage of containers from origin to destination must be identified as all-inclusive freight without dividing them into land costs and freight components. 

Therefore, service providers can only recover costs incurred from the use of the service from those to whom the service was provided and not from a third party with no such contractual liability. The only additional charge recognised under the 2017 regulations was the Delivery Order (DO) fee.

Juriansz pointed out that prior to the 2017 regulations, shipping lines had more than 40 different line items which were levied from importers. 

He further stated that following the recent rescinding of the 2017 regulations, shipping lines had already informed their customers that a component called a Terminal Handling Charge would be payable locally. He cautioned that these additional charges could have a significant impact on the cost of living in the country.