OVERVIEW OF WORLDWIDE CABOTAGE PRACTICES
5.6 CONCLUSION
The chapter set out to identify forms of cabotage practices. Two forms or types of cabotage were identified as the norm worldwide. These are restrictive and liberal cabotage. Open cabotage is not considered a form of cabotage. It is viewed as a fortuitous “form” of cabotage that often arises by virtue of a jurisdiction’s acquiescence to foreign coastal trade involvement rather than a deliberate policy position. In this context South Africa is considered to have no cabotage.
69 Countries that do not practise cabotage but that allow participation in coastal trades on this basis have not been included.
70 KX Li & J Wonham ‘Registration of Vessels – New Developments in Ship Registration’ (1999) 14(1) The International Journal of Marine and Coastal Law 137–154 137.
The chapter described how each form of cabotage operates. In particular, the chapter explained instances of restrictive cabotage practices and their degree of rigidity; and gave examples of countries where they are found. Liberal cabotage practices and mechanisms for their application were also explained. The emphasis was on the fact that liberal cabotage practices depend on waivers implemented under specific conditions usually predicated by tonnage demand and supply cycles of each coastal state. The chapter gave some focus to the EU concept of regional cabotage in light of the fact that the CMTP envisages SADC cabotage.
The chapter then evaluated a broad sample of countries that practise cabotage and assessed the influences of the degree of the strictness of its cabotage principles (or absence thereof). An attempt was then made to relate the result to each jurisdiction’s cabotage practice in general and particularly its ship registration arrangements.
Countries were presented in five categories. The two categories consist of countries that own the highest volumes of deadweight capacity in the world. These are mostly ‘first world’ countries. The third category comprises South Africa’s chief trading partners in the BRICS bloc and Indonesia. In order to make the sample more representative of the world’s total deadweight tonnage, countries that fall outside the list of the leading 35 nations were also discussed. These countries mostly appear in categories Four and Five.
A summary was then made which seems to indicate that the majority of the top 35 coastal jurisdictions largely own tonnage under two forms of fleet registries: under the domestic flag or under the second register. The second register often offers terms which are relatively similar to FOC terms of operation and are better in comparison to those offered under domestic flag registers. Therefore, the degree to which each jurisdiction applies cabotage restrictions seems to determine which of the two forms vessel operators prefer.
Consequently, second registries are often used to lure domestic owners away from traditional FOC registries over which the country has no influence. The second register, which the country controls, is then positioned as a means of retaining the fleet under the country’s authority. Once again, depending on the degree of strict cabotage applied, vessels in second registries are eligible to participate in cabotage trades as these are often typically owned by nationals, manned by local crews, often built locally and in general operated in a manner that promotes the same national interests as vessels under
the so-called “first register”. However, to distinguish between vessels in the first and second registers, it would appear that the former are generally given preference in cabotage trades, while the latter are usually utilised to supplement tonnage shortages and therefore participate in cabotage trades provided certain conditions have been met.
To conclude, there is no debate that South Africa is short on tonnage and related resources for cabotage implementation. Building the domestic fleet on the basis of a second register is not part of the policy. The country does not seem to have the potential for a second register in any event. The only practical option for South Africa remains in substantial acquisitions of tonnage, failing which the country will continue to depend on the involvement of foreign flags for its coastal operation well into the foreseeable future. Since acquisition of suitable tonnage cannot be achieved overnight, pragmatism calls for the operation of coastal trades using foreign flags while building the nationally- registered merchant fleet. Therefore, the scenario points towards the adoption of liberal cabotage because restrictive cabotage severely limits engagement of foreign-flagged vessels. With regard to regional cabotage, the perspective of the CMTP is that SADC cabotage will be born out of the South African fleet. On that premise, the only conclusion is that SADC cabotage cannot be realistically pursued until a South African domestic fleet has been established. Without a domestic fleet, it may simply be too early to consider regional cabotage.
Chapters 6 and 7 will look respectively at restrictive and liberal cabotage. Each practice has been structured on the basis of the individual country’s specific priorities. The aim of the exercise will be to glean the benefits and challenges experienced in the particular jurisdictions. Nigeria and the United States will serve as examples of restrictive cabotage, while Australia and New Zealand will exemplify liberal cabotage.