Blog 118 - We Won the Battle ........... But Lost the War

The Battle Won …….. But the War Lost

A Perspective

With a developing need for trained Indian seafaring officers, the Training Ship Dufferin started training cadets in 1927, almost a hundred years ago, with an Engineering division introduced in 1935. With rapidly improving technological innovations and a need to fast track Indian Maritime activities, the Navigational and Engineering training units were split in 1949, these training activities being held on board the TS Dufferin till then.

DMET, under the aegis of the Ministry of Transport and Shipping, was established in Calcutta in 1949 and moved to its new building at P-19, Taratolla Road in 1953, to provide Pre-Sea Training for Engineers, who can then serve the Merchant Marine and / or the Indian Navy. The then Chief Minister of West Bengal, Dr. BC Roy, lobbied for DMET to be established in Calcutta, with promises of land and aid, the quid pro quo being the allotment of a certain percentage of the seats to Bengalis.

It was designed as a four years’ training course, with emphasis on workshop and on-board training (on vessels in port) for the first three years (with academic classes after workshop, in the night) and a 4th year of academic and laboratory training.

In the early 1960s, the intake capacity was increased to 100, selection being made on the basis of an all-India competitive exam, followed by an interview. 40 were sent to Bombay and 60 to Calcutta, all 100 joining up together for the final year at Calcutta. The reason for this was the 3 years’ practical training was to be done in recognized Marine Workshops, mostly situated in Bombay and Calcutta in that era. During those three years we were to work as apprentices in workshops such as Calcutta Port Commissioners or CPC (later called Calcutta Port Trust), Garden Reach, British India Steam Navigation or BSN (called so at that time) and a few more in Calcutta, Bombay Port Trust, Mazagaon Docks etc in Bombay.

Unlike civilian institutions, it was established as a quasi-military Institute, directly under the President of India, under the aegis of the Ministry of Shipping and Transport. The trained cadets would then be absorbed and employed by Indian shipping companies. Indian shipping, in 1966, was about to take a quantum leap through the help of heavily subsidised loans from the Government banking sector.

The navigational side, through the auspices of TS Dufferin, followed a similar trend, increasing their intake of cadets to cater to increasing demand from the shipping industry, mostly Indian owned. As the years went by and the “Dufferin” aged, the necessity of more modern facilities gave rise to a brand new training ship from 1972, “TS Rajendra”, named after the famed Chola king, Rajendra Chola, whose navies and armies dominated a major part of Asia exactly a thousand years ago. Progressively, the “Rajendra” gave rise to the “TS Chanakya”, a shore based establishment, in contrast to the previous two which were floating establishments.

Before the 1960s, the major Indian shipping companies were Scindia Steamship (1919), Great Eastern (1948), India Steam Ships (ISS), Western Shipping Corporation and Eastern Shipping Corporation. The last two were amalgamated and became a public sector company, Shipping Corporation of India, in 1962.

The Shipping Corporation of India (SCI) after its inception, supported by Government funds, grew quickly in fleet size, the expansion necessitating an increase in trained officers, which were provided by the “Dufferin” and DMET. The increase of intake of cadets into both these institutions coincided with the SCI becoming a major player in Indian Shipping, whether by design or coincidental I am unable to establish.

In an era - ‘50s, ‘60s and ‘70s - when Government planning was haphazard, Engineering Colleges mushroomed without the guarantee and possibility of jobs in the private sector after graduation. In that period, the Merchant Navy was a safe haven for those passed out of the ‘Dufferin’ and DMET, as every single one of them were given employment by Indian companies.

The ‘Dufferin’ or ‘Rajendra’ cadets - on passing out - were taken into shipping companies as cadets for a further period of on-board training, culminating in their appearing for and passing their Second Mate’s examinations, with assured employment with the parent company after passing.

For Navigational cadets, another avenue for joining the Merchant Navy was the direct route - to join a shipping company as a raw cadet and serve on board for four years before appearing for his Second Mate’s examination. A very small percentage made it across this line. Unsurprisingly, they were mostly children of seafarers or those in influential management positions in shipping companies.

On an almost parallel plane, the DMETian had to obtain the first of four certificates, the Second Class Part ‘A’, to qualify himself for a job on board ship. The situation was such that he was swooped up by shipping companies as soon as he obtained the hard copy of his ‘Part ‘A’ Certificate and posted as a Fifth / Junior Engineer at once.

Another avenue, a difficult one, to obtain a job as a Junior Engineer in a shipping company was to serve as an apprentice in a recognised (by the Ministry of Transport as was then called)Marine Workshop for four years, appear for his Second Class Part ‘A’ and obtain a job in any company that would take him.

In the 1950s and 1960s, there was an inherent bias amongst shipping companies as they preferred Dufferin trained cadets and Dmet trained engineers to those who qualified themselves directly. One had to be well connected to that shipping company to enter as a direct cadet or a Junior Engineer.

In the 1950s and 1960s, almost all found themselves a job with Indian companies. The pay was as per what was negotiated between the Maritime Union of India and the National Ship Owner’s Association. Although low in the first couple of years, the take-home amount quickly escalated with promotions to a higher rank. Moreover, other benefits abounded, such as gratuity, provident fund, paid leave, leave encashment.

In the 1960s and 1970s, sea faring jobs were monetarily a safer bet than the uncertain shore scenario in India. But the paradox was that brides - for seafarers - were hard to come by, as the average, conservative, Indian householder looked down upon sailors, as they would not be home for long stretches.

A very few ventured out of Indian Shipping into foreign domains but were employed in ranks much lower than their worth and qualification. P&O, Blue Funnel and Hansa come to mind. Many of the British shipping companies had crews recruited from India, but not very many officers.

The early 1970s brought in a curious and exciting factor into the life of the Asian seafarer - the Third Party Ship Management Companies.

Most European, privately owned, shipping companies of the pre Second World War era not only survived but prospered amidst the ravages of war, as they were a key element in the survival of their nation state during the war. Post war, they were the first ones to shed the shackles of war and, foreseeing the immense demand for goods and material to reconstruct and re-establish nations in ruin, quickly went from war mode to peace mode. In the process, one found European shipping companies to be (nearly) the only ones prepared and ready for the huge demand for the transport of material in the post world war re-building era, due to which they were able to establish a monopoly and keep any other competition out. The British and the Norwegians were the first ones out of the gate, with the Greeks following after they got their house in order. The US Merchant Navy also boomed, as they carried volumious amounts of cargo out of the USA.

The Swedes, the Dutch all got into shipbuilding in a very short time, along with producing and manufacturing the necessary engines and machinery. The Germans followed as soon as they could rise from the ashes.

Maritime laws, such as SOLAS, were dissected and re-formalised in the light of the lessons of war. MARPOL was to follow later, after several tanker accidents.

As the world started paying the major portions of shipping related profits into the coffers of European companies, there emerged an elite class of seafarer - the European seafarer. He was handsomely paid, treated with soft gloves and with care, protected by powerful unions. Frequent upward revision of salaries, union powered, meant they continued to remain the elite.

The 1960s saw competition brewing in the shipping world which, till then, had been mostly Euro-centric, with the rise of Japanese and South Korean shipping and, to a lesser extent, Chinese and Indian shipping.

To the European companies, competition from other parts of the globe meant lesser profits and, with ever increasing crewing costs, smaller bottom line figures. The Asian shipping companies were proving to be geese laying golden eggs, as their nation crew were paid much lesser than their European counterparts, while at the same time nearly charging the same freight rates as was then prevalent world wide.

The balance was tilting towards Asia, with Asian owners only needing to ratchet up their tonnage in order to achieve some semblance of domination which, except for Japan, China and South Korea, most Asian nations were unable to do due to lack of funding and disinterested governments.

This was the scenario in which European companies carried out a coup de tat of sorts in accepting the need for Third Party Ship Management, after realising that their bottom lines were fast losing the gloss of the last two decades.

With an ex-mariner, Capt AJ Vanderperre, leading the fray, the Ship Management concept was born and, in early 1970 sanctified by several European companies giving some of their older ships for management , using Asian crew and officers to staff them.

As the nationality rules of the parent companies forbade the use of crews of other nations, the ships given for management had to change their ports of registration - flag change.

Thus came “Flags of Convenience”.

Very few Asian nations had , by then, established their own Maritime Departments nor had outlined procedures for registering ships under their flags. HongKong, Singapore and India were three nations that had the required international protocols for registering ships.

Most of the first lot of ships that were sent by the European owners were registered in either HongKong or Singapore.

India was not even considered, as the Indian Government failed to market its ability to register these ships that were transferred out from Europe. Not only that, but all formalisation processes were often riddled with red tape.

Had they eased the procedures and allowed ships to be registered in India, they would have been in on the ground floor of what was to became a colossal industry. This was in spite of the fact that the majority of the management positions in these management companies were taken up by Indians right from the initial stages.

European companies had to disinvest themselves from their parent nation - in small proportions - by

Getting permission from the parent nation and signing agreements with the seafarer unions to remove the transferred ships from the list.

(They were also assisted by the fact that there were fewer and fewer employable seafarers, due to graduates finding better prospects in fields other than the maritime fields. The only ones remaining were the crew who moved up the ladder and took up senior positions on board, after passing the requisite examinations, with very poor influx at the lower end).

(Unlike the British and Indian policy of making it very difficult for crew members to break through the barrier and become officers, the upward mobility of European crews was more or less guaranteed, as long as they pass the necessary examination).

Setting up dummy corporations in the country where the transferred ship was to be re-registered. All it required was leasing a desk in an office space and putting up a small brass signboard on the door, after paying the stipulated fees for the registration of the ship.

Setting up full fledged ship management offices or signing contacts with already established ones. The location of these offices were either HongKong or Singapore, mostly HongKong.

If the former, agents had to be necessarily appointed for the task of recruiting officers and crew in either India or the Philipines. The already established ones opened full fledged recruitment offices.

The initial flow of crew and officers were mostly from India.

Initial registration of these transferred ships were in HongKong and Singapore, but quickly expanded to include Liberia, Panama and, at a later stage, Bahamas, Nauru, Marshal Islands.

Flags of Convenience abounded, bringing several acceptance problems to the fore, particularly from the more advanced nations. The same ships which were serving under European flags till a year ago and crewed by Europeans and which used to go in and out of ports without any hassles were now suddenly facing serious issues in the same ports, now with an Asian crew.

One could not call them teething problems for the newly established Management companies for they were quite sizable obstructs from authoritarian establishments. Inspections became more frequent and scrutiny was deeper than normal, with the avowed idea of finding deficiencies and faults leading to delays to ships and ‘no sail’ orders, all in order to portray the crew and the manager in a bad light.

The Asian seafarer working for these management companies was, obviously, paid considerably less than his European counterpart - which was the main reason for the inception of the Third Party Managers in the first place - but it had the effect of inviting frequent inspections by ITF (International Transport Federation) representatives in many ports. What was more ludicrous was that these ITF representatives would be workers on the local harbour tug, would demand to see all the ship’s certificates, documents, log books - which were supposed to be confidential and only for certain eyes - and have a meeting with all crew in an assembly. The monthly wages compilation had to be laid out before them for their scrutiny. They would then send their reports to their Head Office.

All these constituted harassment of various sorts and were often serious irritants. Quite a few years later, ITF, an avowed campaigner against Flags of Convenience, had to become more pacifist after the coming of the ’Asian ITF’.

One of the pet peeves of Port State Control Inspectors of non-Asian countries was that officers of rank did not possess Certificates of Competency issued by the nation where the ship was registered. They argued that an Indian or Singaporean issued Certificates were not legal tender on a ship flying a HongKong or Liberian or Panama flag. Their bias was obvious as they accepted a British Certificate of Competency without any hesitation. (There were several Indians who had gone to places like South Shield’s, UK for their Certificates).

It was a morass that could have become worse, as each Officer would have had to re-write his competency examination in order to obtain the certificate of the country in which the ship was registered.

I do not know if the system was already in place or new ordinances were introduced to offset this morass. Each Flag of Convenience started issuing equivalent Certificates of Competency, valid for 5 years, based on the officer’s Indian certificate. Similarly, Seaman’s Books were also issued. This put paid to the non conformities / complaints from outside authorities, Australia’s AMSA and European officials being the most vocal.

The ITF voiced their demands that ITF wages - which were on par with European wages - should be paid to all staff, but it died a quick death. In later years, ITF would enter the picture only when called to settle wage disputes on board loosely run ships.

The era of the Asian Seafarer had arrived.

From the time of conception of these Third Party Management Companies the underlying plan - of most of them - was to use officers and crew from India, with other smaller Asian nations making up any deficit.

But, as more and more companies transferred their ships to Ship Management Companies located in Asia, it soon became apparent that India was unable to supply the necessary manpower.

Indian crew were the first to feel the pinch as they were replaced by crew from Singapore and the Philipines by the beginning of the 1980s.

The dearth of Indian Officers started showing up in the early 1990s, wherein most companies turned to recruiting from Manila.

The Philipines were more or less the first in realising that there was an opportunity for their nation becoming the premier supplier of crew for the Management Companies. They rapidly expanded, firstly, their crew training facilities and, later, for their Officer training and Examination and Certification.

This expansion served them very well when management companies proliferated and each company’s ships increased in number.

Initially, their Officer Certification was, to a certain extent, muddled and flawed but very quickly organised into a firm structure, with the coming into force of the STCW Convention.

Meanwhile, the Indian establishment were very slow in taking advantage of a burgeoning market by not increasing the number of certification ready Deck Officers and Engineers. By the time Government permission for new training establishments in the private sector was given, it was already too late.

This was at a time when the Indian economy was in bad shape in terms of balance of trade. Apart from hand outs or soft loans from several countries, the country was in a bad state in terms of forex reserves. At one stage, India came to a precarious point where no country or World Bank or IMF was willing to lend any financial support and the Indian Government was forced into the ignominy of resorting to pledging its reserves of gold with the Bank of England and other sources in order to get foreign exchange. All this while, the flow of foreign exchange into India was, to a larger extent, from the job workers in the Persian Gulf and, to a lesser extent, from the overseas marine fraternity of seafarers. I recall that non-resident account’s fixed deposits would earn - for a couple of years - nearly 14% interest, indicating how precarious the Indian economy had become. Fortunately, the ‘never again’ thought became primary and the Indian Government changed its economic course.

Today, private Marine Training Academies profligate, some even located in land locked areas, and regularly spew out cadets ready to join ships, after completing their training. But, alas, there are not many takers especially in the Junior levels.

The only way that these boys and girls find their way into working on ships is if they are sponsored by a Management company which, on the whole, constitutes a very small proportion of the trained number.

Added to that is the high cost of training in these Marine establishments.

What was once a near 100% job guaranteed profession now stands as a profession where entry level jobs are scarce. I am unaware of any statistics in this regard, but have been made aware of the problem of employment at the entry level by several cadets who have completed their training, but find that they are unable to find a placement even after more than a year.

Meanwhile, the fact that ‘Minimum Manning Certicates’ of ships do not specify the necessity of Junior Engineers or Deck Cadets, has not helped the situation. The converse is true, wherein, many companies have taken advantage of the provisions of the ‘Minimum Manning Certificate’ and, in most cases, do not employ any Junior Engineers or Deck Cadets so as to reduce on overall wages.

What are the thousands of boys and girls who finish these training / graduation courses to do if they are not provided job opportunities?

Indian ships are not enough in number to provide employment to all the ready candidates. Moreover, most Indian companies also, nowadays, have a ‘contract’ based employment, similar to foreign based Management companies.

In my opinion, it is a fool hardy decision to not recruit junior officers as the future manning of ships is very likely going to get affected. Moreover, the juggernauts of today - the 24,000 TEU container vessels and the 350,000 tonner bulk carriers - have reduced the intake of seafarers drastically, as the manning levels of a 5000 TEU container vessel or a 70,000 ton bulk carrier is almost the same as the mammoths.

Summing up, we missed the bus on several occasions due to lethargic or indifferent approach in ramping up of producing trained crew / certified officers.

First - when we could have allowed registry of transferred vessels. We could have added a clause that ships registered with us should employ Indian staff.

Second - we could have ramped up our training of crew in order not to allow others to push us out.

Third - the mushrooming of Maritime Training Institutes came too late for value addition to the Indian seafarer.

Had we grabbed the opportunities afforded us, we would, even at this stage, have monopolised shipping which opportunity really went abegging, the slack being taken up by another nation.

Imagine the employment market if our countrymen were to completely staff the 500+ ships of Anglo Indian Ship Management. At a very conservative estimate, more than 2000 vessels are under Third Party Management, which would have meant employing at least 100,000 seafarers, not to mention the spin off of jobs ashore in recruiting, processing, training. Employment opportunities at sea and ashore would have reached very high levels.

The only consoling factor in this scenario, with which we can pride ourselves, is Indians weathered the vagaries of the initial years of the 1970s and set up management systems, whether afloat or ashore, with solid foundations that last to this day.

““There is a tide in the affairs of men

Which, taken at the flood, leads on to fortune;

Omitted, all the voyage of their life

Is bound in shallows and in miseries.

On such a full sea are we now afloat;

And we must take the current when it serves,

Or lose our ventures.”

― William Shakespeare , Julius Caesar

The Battle Was Won …….. But We Have Lost the War.

................... Rangan