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Time of India
17-06-2025
- General
- Time of India
Exposing Systemic Flaws: The Sinking of MSC ELSA-3 and Its Lessons for Global Shipping, ET Infra
Advt Advt By , ETInfra On Saturday, May 24 around 1.30 p.m., container ship MSC ELSA-3 was just 38 nautical miles off the coast of Kochi when it developed a list or tilt to one side due to flooding in one of its holds, prompting a distress call from the ship's Captain Alexander Ivanov , a Russian call triggered panic among the authorities and as the news spread, the maritime and fishermen community feared the the 640 containers the ship carried (some of which had already fallen into the Arabian Sea due to the listing), 12 were loaded with calcium carbide, a hazardous chemical known for its violent reaction with water. In its tanks, the ship had 367.1 metric tonnes of very low sulphur fuel oil and 84.4 metric tonnes of oil/hazardous chemical spill would be disastrous for the environment and coastal communities apart from the expensive clean limited capacity to mount a coordinated emergency response and the absence of Tier 1 oil spill and salvage capacity in Indian ports such as Cochin, where the ship was headed, played on the minds of the authorities as the day wore on and the ship listed dangerously to Cochin Port Authority did not even have ocean going tugs or oil spill response units to assist the oil or chemical spill response equipment from abroad (nearest being Singapore and Bahrain) can take anywhere between 24 to72 hours, a delay that could prove the morning of Sunday, May 25, the ship capsized and sank in one of the biggest shipping disasters on the Indian the authorities scampered to get details of the ship to pin responsibility for the next course of action and check environmental hazards, they encountered, first-hand, what is regarded as one of the most opaque and under-regulated dimensions of global maritime commerce: the fragmented ownership, registration, management, and manning structures that define global shipping operations from being an anomaly or an isolated incident, the ship's convoluted configuration is emblematic of a deliberate design that prioritizes legal insulation over the 28-year-old container ship went down, it was flying the flag of Liberia - a classic Flag of Convenience ( FoC ) choice known for minimal regulatory intervention. A Flag of Convenience (FoC) or open registry is a business practice whereby a ship owner registers a vessel in the ship register of a country other than that of his own. The FoC regime does not levy any tax on ship owners but charge an annual amount based on the gross registered tonnage (GRT) of a ELSA-3's Liberian registry was only the beginning of a deeper maze. The vessel is owned by a German company, chartered on a slot-sharing basis by Mediterranean Shipping Company S.A., the world's biggest container line headquartered in Geneva, Switzerland and managed operationally by a firm based in Cyprus. The ship classification responsibilities were assigned to the French classification society Bureau Veritas (ship classification societies such as BV certifies a ship for its sea worthiness), while the ship was manned by a multinational crew comprising seafarers from Russia, Philippines, Ukraine, and other complex matrix of international ownership and management represents a microcosm of jurisdictional detachment that bedevils modern day implications of this web of opaque configuration are enormous. When the MSC ELSA-3 capsized and sank, it became virtually impossible to pin down a single point of liability or even a coherent chain of operational command. The flag state, Liberia, declined to participate in the investigation. The classification society that had certified the ship as seaworthy only months prior was not accountable for oversight failures. The German ship owner has maintained a legal distance through limited liability constructs. The manager in Cyprus held operational control, but not ultimate legal liability. MSC, the container shipping behemoth, claimed only a commercial interest through chartering of the fragmented control structure – typical of FoC regimes – obstructs clear liability and limits enforceability. The flag state's (Liberia) refusal, in writing, to participate in the post-incident investigation exemplifies the dilution of responsibility that FoC registration extreme fragmentation of responsibility is not accidental; it is engineered. It allows shipowners and charterers to dilute exposure to environmental damage claims, labour violations, tax liabilities, and safety lapses. In the case of MSC ELSA-3, this is further evidenced by the vessel's documented history of frequent name changes and ship registry shifts. From ' CSAV Barcelona ' to 'TMM Hidalgo' to ' Delmas Tourville ' to 'Jan Richter' to 'MSC ELSA-3', the ship had changed its identity at least ten times in less than two decades. Each change of name, flag, or manager coincided with opportunities to shed liability, evade scrutiny, or reposition under a more favourable regulatory practices, while not illegal, are at odds with the principles of transparency and responsibility embedded in the global maritime regulatory framework. The International Maritime Organization (IMO), the United Nations agency that regulates global shipping, has long promoted uniform safety and environmental standards, but in reality, fragmented governance severely weakens container ship had a history of deficiencies, the most recent of which were detected at Tuticorin Port in a ship like MSC ELSA-3, legally registered in Liberia, owned by a German company, managed from Cyprus, classed with a French entity, operated from the Mediterranean, and manned by a multilingual crew, suffers a major casualty, coastal states like India are left to manage the colossal crisis involving a clean-up costing hundreds of crores with minimal issue is compounded by the lack of mandatory public disclosure on beneficial ownership, the actual role of commercial operators in daily navigation decisions, and the operational influence of ship managers. Even in cases where insurers such as the Protection and Indemnity (P&I) Clubs (third party liability underwriters) are involved, jurisdictional complications and multi-layered contracting structures delay compensation, investigation, and India is to protect its coast, trade routes, and maritime environment, it must challenge this structural opacity. Ships calling at Indian ports must be subjected to stricter requirements on transparency in ownership, crew composition, and management accountability. India must also push the IMO for reforms mandating full disclosure of beneficial ownership, enhanced flag state obligations, and clearer delineation of managerial versus operational control MSC ELSA-3 was not just a casualty of rough seas or human error. It was the predictable outcome of a system designed to divide responsibility to the point of disappearance. If left unchecked, this model will continue to shift the consequences of maritime failures onto states and communities least equipped to bear them. It is time for coastal nations to reclaim regulatory authority over ships that enter their waters, regardless of the paper trail they carry.
Economic Times
16-06-2025
- Business
- Economic Times
Clear up the paper boat trail: Lessons from Kerala coast shipwreck
Too many hands on deck On May 24, MSC ELSA-3 was 38 nautical miles off the Kochi coast when it developed a list, or tilt to one side, prompting a distress call. Among the ship's 640 containers, 12 were loaded with calcium carbide, a hazardous chemical known for its violent reaction with water. It had 367.1 MT of low- sulphur fuel oil and 84.4 MT of diesel in its tanks. A day later, the ship capsized and sank in one of the biggest shipping disasters on the Indian limited capacity to mount a coordinated emergency response and the absence of tier-1 oil spill and salvage capacity in Indian ports such as Kochi, where the ship was headed, played on the minds of authorities. An oil/hazardous chemical spill would be disastrous for the environment and coastal communities, apart from the expensive clean-up. Even the state- owned Cochin Port Authority did not have ocean-going tugs or oil spill response units to assist the ship. As authorities scrambled to get details of the ship for the next course of action, they encountered an opaque and under-regulated dimension of global maritime commerce: the fragmented ownership, registration, management and manning structures that define global shipping operations today. Far from being an anomaly or an isolated incident, the ship's convoluted configuration is emblematic of a deliberate design prioritising legal insulation over the ship went down, it was flying Liberia's flag - a classic Flag of Convenience (FoC) choice known for minimal regulatory intervention. An FoC, or open registry, is a business practice whereby a shipowner registers a vessel in the ship register of a country other than their own. The FoC regime does not levy any tax on shipowners but charges an annual amount based on the ship's gross registered tonnage (GRT).MSC ELSA-3 is owned by a German company, chartered on a slot-sharing basis by Mediterranean Shipping Company S.A., headquartered in Geneva, and managed operationally by a firm based in Cyprus. The ship classification responsibilities were assigned to the French classification society Bureau Veritas, while a multinational crew manned the MSC ELSA-3 capsized and sank, it became impossible to pin down a single point of liability or even a coherent chain of operational command. Liberia declined to participate in the investigation. The classification society that had certified the ship as seaworthy was not accountable for oversight failures. The German shipowner has maintained a legal distance through limited liability constructs. The manager in Cyprus held operational control, but not ultimate legal liability. MSC, the container shipping behemoth, claimed only a commercial interest through the chartering of the fragmented control structure obstructs clear liability and limits enforceability. The flag state's refusal to participate in the post-incident investigation exemplifies the dilution of responsibility that FoC registration extreme fragmentation of responsibility is engineered. It allows shipowners and charterers to dilute exposure to environmental damage claims, labour violations, tax liabilities and safety the case of MSC ELSA-3, this is further evidenced by the vessel's documented history of frequent name changes and ship registry shifts. The ship had changed its identity at least 10 times in less than two decades - an opportunity to shed liability, evade scrutiny, or reposition under a more favourable regulatory practices, while not illegal, are at odds with the principles of transparency and responsibility embedded in the global maritime regulatory framework. The International Maritime Organization (IMO) has promoted uniform safety and environmental standards, but fragmented governance severely weakens a ship like MSC ELSA-3 suffers a major casualty, coastal states like India are left to manage the colossal crisis, involving a clean-up costing hundreds of crores, with minimal issue is compounded by the lack of mandatory public disclosure on beneficial ownership, the actual role of commercial operators in daily navigation decisions, and the operational influence of ship managers. Even in cases where insurers such as the protection and indemnity (P&I) clubs (third-party liability underwriters for ships) are involved, jurisdictional complications and multilayered contracting structures delay compensation, investigation and India is to protect its coast, trade routes and maritime environment, it must challenge this structural opacity. Ships calling at Indian ports must be subjected to stricter requirements on transparency in ownership, crew composition and management accountability. India must also push the IMO for reforms mandating full disclosure of beneficial ownership, enhanced flag state obligations, and clearer delineation of managerial versus operational control left unchecked, this model will continue to shift the consequences of maritime failures onto states and communities least equipped to bear them. It is time for coastal nations to reclaim regulatory authority over ships that enter their waters, regardless of the paper trail they carry. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Worrying cracks hiding behind MG Motor's own 'house of Windsor' Is India ready to hit the aspirational 8% growth mark? INR1,300 crore loans for INR100? Stamp duty notice to ArcelorMittal, banks. Why failed small businessmen die by suicide when those behind big blow-ups bounce back? 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News18
12-06-2025
- General
- News18
'Undeclared Hazards, Illegal Registrations': Singapore Ship Blaze Exposes Loopholes, Ecological Risks
Last Updated: Govt reports suggest these incidents have shown that the abuse of Flags of Convenience (FoC) is not just a loophole but a deliberate strategy for profit at the expense of safety. India is facing significant ecological and social costs due to the mishandling of ships by third countries, government sources have told CNN-News18. Government sources have raised serious concerns following recent coastal accidents. The sinking of the MSC Elsa 3 in May 2025 and the MV Wan Hai 503 fire in June 2025 have highlighted significant flaws in the maritime system. The fire on the MV Wan Hai 503 poses a severe risk to Indian coasts. Government reports suggest that these incidents have shown that the abuse of Flags of Convenience (FoC) is not merely a loophole but a deliberate strategy for profit at the expense of safety. Currently, 45 per cent of global tonnage sails under FoCs, creating a conflict between sovereign accountability and negligent convenience. The MV Wan Hai 503, carrying 2,000 tonnes of fuel oil and 240 tonnes of diesel, is a significant oil spill threat. Government sources warn that a breach in the vessel could lead to a catastrophic spill, contaminating Kerala's coastline from Kozhikode to Kochi during the monsoon season. Additionally, the ship has 157 containers of hazardous materials, including pesticides (Class 6.1), lithium batteries (Class 9), and flammable liquids (Class 3), posing risks of toxic cargo leakage. These substances could leach toxins into marine ecosystems and be carried ashore by monsoon waves, threatening fish stocks and coastal habitats. Already, 40–50 containers have fallen overboard and are drifting towards Kerala's coast, sources said. Government inspections have been criticised for being perfunctory, often relying on paperwork over physical checks. For example, the MSC Elsa 3 had 21 deficiencies noted in Rotterdam but was never declared unseaworthy. Inadequate risk profiling allows ships with repeated violations, like the MSC Elsa 3 with its flag-hopping history, to evade scrutiny. Although the Sea Cargo Manifest and Transshipment Regulations (SCMTR) of 2018 mandate digital manifests for hazardous goods, the MV Wan Hai 503 carried undeclared explosives among its hazardous cargo. Local authorities in Kerala were also criticised for failing to issue timely public advisories regarding the MSC Elsa 3's calcium carbide cargo. There are serious accountability gaps in the system, with FoC abuse being very common. According to government data, 45 per cent of global shipping tonnage is registered under Panama, Liberia, and the Marshall Islands, enabling regulatory evasion through lax oversight, tax avoidance, and weak labour enforcement standards. For instance, the MSC Elsa 3, which sank with 13 undeclared hazardous containers, was registered under the Liberian flag. Similarly, the Wan Hai 503 was Singaporean-flagged but owned by Taiwanese interests, with hazardous cargo misdeclaration suspected in the explosions. FoC states often lack the resources for thorough investigations, delaying liability attribution and compensation. Liberia, for example, ignored India's probe into the MSC Elsa 3 incident. FoC states like Panama, Liberia, and the Marshall Islands outsource vessel inspections to private agencies, leading to cursory checks and certification. The MSC Elsa 3, despite its 21 deficiencies, was never declared unseaworthy. The Wan Hai 503, carrying 157 containers of hazardous materials including undeclared explosives and lithium batteries, also exemplifies this issue. These incidents reflect broader systemic problems, including the hiring of cheap, inexperienced labour to cut costs, sources point out. The Wan Hai 503's crew, lacking training in hazardous cargo management, delayed fire containment efforts, leading to the loss of four crew members during evacuation and inadequate emergency protocols. The MSC Elsa 3's underwater fuel tanks posed a significant oil spill risk affecting 200 km of coastline. FoC states often avoid funding cleanups, shifting the burden to coastal states. Following these incidents, Kerala banned fishing, severely impacting communities during peak season and causing a 40% drop in tourism revenue post-Elsa 3 due to pollution fears. Furthermore, the MSC Elsa 3 criminal case remains stalled due to Liberia's non-cooperation, while the Wan Hai 503 owners delayed sharing cargo manifests. AIS manipulation is another issue, as FoC vessels often deactivate trackers to hide their locations. Government sources report that GPS jumps increased from 600 km in 2024 to 6,300 km in 2025, raising collision risks. Shadow fleets under FoCs like Panama are known to transport illegal goods, with 29 per cent of global vessels using FoCs to facilitate arms and drug smuggling. The mishandling of ships by third countries under FoCs poses significant ecological and social risks to India, necessitating urgent systemic reforms and stricter regulatory oversight. First Published: June 12, 2025, 11:38 IST News india 'Undeclared Hazards, Illegal Registrations': Singapore Ship Blaze Exposes Loopholes, Ecological Risks
Time of India
11-06-2025
- Business
- Time of India
India guns for FoC regime as MSC ELSA 3 disaster hits hard, Infra News, ET Infra
Advt Advt By , ETInfra Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis. Get updates on your preferred social platform Follow us for the latest news, insider access to events and more. MUMBAI: India is gunning for ships registered in so-called Flags of Convenience (FoC) regimes such as the Liberia-flagged MSC ELSA 3 that capsized and sank off the coast of Kerala on May 25 with a senior official saying that the country 'must call for tighter international regulation of FoC regimes through the International Maritime Organisation (IMO) to hold them accountable'.'India's reliance on ships registered in FoC regimes for over 97 per cent of its export-import (EXIM) trade has quietly but alarmingly evolved into a critical vulnerability,' said the official. 'It is a hidden risk in India's maritime trade due to our weak leverage over FoC vessels ,' he FoC vessels, typically registered in jurisdictions such as Liberia, Panama, and the Marshall Islands, promise cost-efficiency and operational flexibility. 'But, behind this apparent commercial advantage lies a systemic erosion of regulatory oversight, accountability, and maritime sovereignty . The recent MSC ELSA 3 disaster off the Kerala coast offers a chilling illustration of the dangers embedded in this dependence,' the official be sure, FoC registries are widely used in global shipping, accounting for nearly 76 per cent of the world's merchant fleet by deadweight tonnage or DWT. These registries typically offer lax regulatory environments, permitting shipowners to circumvent stringent labour laws, environmental obligations, and safety protocols. 'In effect, they allow for the outsourcing of accountability. A vessel owned in one country, operated from another, and flagged in a third, with little to no regulatory coherence between them, is increasingly the norm,' the official pointed which depends on such ships for an overwhelming majority of its international trade, has little say in their operation or safety standards.'When things go wrong, as it did with the MSC ELSA 3, the costs are borne not by the flag states, but by coastal nations. The Liberian-flagged ELSA 3 had a murky record: multiple name changes, a long list of port state deficiencies, and a cargo manifest including 12 containers of calcium carbide, a highly dangerous substance. After the vessel capsized, Liberia, the flag state, refused to participate in the investigation. While technically permissible under the United Nations Convention on the Law of the Sea (UNCLOS), such non-participation exposes the glaring shortcomings of the FoC model,' the official refusals, though, are not rare. The global record of FoC vessels is riddled with examples of regimes shirking 1999, 'Erika', a Maltese-flagged tanker, sank off the coast of Brittany, causing a spill of 20,000 tonnes of oil and devastating marine life in one of Europe's worst environmental disasters. The regulatory response from the flag state (Malta) was 2002, the oil tanker 'Prestige', flying the Bahamas flag, broke in two off the coast of Spain, spilling over 63,000 tonnes of heavy fuel oil into the Atlantic. The cleanup stretched across the Spanish, French, and Portuguese coasts and cost over $1 billion. The flag state (Bahamas) remained largely absent from the such incidents include 'MV Rena' off the coast of New Zealand in 2012 and the 'MV Wakashio' off Mauritius in 2020 - both FoC vessels, both culminating in environmental disasters, and both met with detachment from the FoC MSC ELSA 3 incident, according to the official, is a continuation of this disturbing pattern that underscore how the FoC system enables shipowners to evade accountability, placing disproportionate burdens on coastal nations.'The fallout, both environmental and administrative, fell squarely on Indian agencies, while the flag state (Liberia) and the shipowner remained comfortably insulated. Such a lopsided burden-sharing structure is deeply problematic for a country like India, which is aspiring to be a global maritime hub and a responsible coastal state,' the official ships are frequently crewed by underpaid, undertrained personnel from multiple nationalities, making enforcement of labour standards and safety training extremely difficult, said a shipping industry official. Several reports have flagged discrepancies in crew competency, falsified certifications, and weak safety cultures aboard such ships. Indian Port State Control inspections frequently cite such issues, but with limited capacity and jurisdiction, enforcement is often superficial, he pointed out.'India's dependence on FoC ships also means a diminished role for its domestic shipping industry, weakening the strategic and economic resilience of the nation. At a time when geopolitical and climate risks are rising, this lack of sovereign control over vessels operating on national trade routes is a strategic liability,' the industry official observed.A concerted policy reorientation is required to tackle this issue, the government official mentioned earlier said.'India must renew efforts to strengthen its own flag registry and incentivise Indian ship ownership. It must call for tighter international regulation of FoC regimes through the IMO and allied maritime conventions. The current overdependence on FoC ships may appear economically expedient, but it is strategically reckless and environmentally dangerous. The MSC ELSA 3 tragedy is not an outlier, it is a warning. Unless India takes corrective action, it risks being perpetually vulnerable to the costs of a global shipping system designed to evade responsibility while enjoying unrestricted access to coastal economies like India,' the official added.
Hindustan Times
04-06-2025
- Business
- Hindustan Times
Troubling gaps in India's coastal governance
More than a week after a container ship with sensitive cargo sank off the Kerala coast, there are few indications of how the incident occurred, or of the full extent of environmental damage. While port authorities maintain there has been no significant oil spill, the discovery of floating nurdles along coastlines in Kerala and Tamil Nadu has raised red flags. The underlying regulatory questions, perhaps more pressing, remain unanswered. The capsizing of the Liberia-flagged MSC ELSA 3, about 40 nautical miles off Kochi, has exposed troubling gaps in India's coastal governance. The vessel was carrying 643 containers, including a declared consignment of hazardous materials such as calcium carbide, a volatile chemical known to react explosively with seawater. It was also reportedly laden with furnace oil and diesel for propulsion. That such a ship, operating under opaque ownership and sailing under a flag of convenience, was allowed to transit between two Indian ports without closer scrutiny reveals a deeper malaise — a regulatory culture overly reliant on paperwork and cursory checks, rather than robust, ground-level enforcement. Yet effective crisis management is no substitute for strong preventive oversight. The ELSA 3's passage from Vizhinjam to Kochi, a short domestic leg possibly linked to cargo bound for a longer voyage, should have raised multiple red flags. The vessel was registered in Liberia, a country known for its open registry and lax regulatory controls. As one of the most prominent 'flags of convenience' (FoC) states, Liberia is frequently used by shipowners seeking to avoid stricter labour, safety, and environmental standards. Tellingly, Liberia has reportedly declined to cooperate with any formal investigation, forcing Indian authorities to confront the legal and regulatory fallout alone. The vessel's crew composition and operational history only deepen concerns. Over the past two decades, the MSC ELSA 3 had reportedly changed names and flags multiple times, a practice known as flag hopping, often used to evade regulatory scrutiny. Its multinational crew, comprising Russians, Ukrainians, Georgians, and Filipinos, is not unusual in global shipping, but such combinations often signal low-cost, third-party management with diffuse lines of accountability. These are not trivial procedural lapses. When hazardous cargo is transported through domestic waters, transparency of ownership, clarity about crew competence, and rigour in cargo verification must be non-negotiable. Yet there is no evidence that authorities conducted meaningful checks before the ELSA 3 sailed from Vizhinjam. Equally troubling is the failure to translate technical risk into public safety measures. Fisherfolk and environmental groups along the Kerala coast have expressed frustration over the absence of timely advisories and delayed official communication. Even as coastal communities reported floating debris, tar balls, and chemical odours, government response remained muted. India's legal frameworks for hazardous cargo management are reasonably comprehensive on paper. The Merchant Shipping (Carriage of Cargo) Rules, 1995, issued under the Merchant Shipping Act, 1958, require detailed cargo manifests, safety protocols, and hazard disclosures. For hazardous materials, India follows the International Maritime Dangerous Goods Code, enforced through the directives of the directorate general of shipping. The country is also a signatory to the MARPOL Convention, which sets international standards for oil-spill prevention and marine pollution control. Yet the gap between regulation and enforcement remains glaring. Inspections are often perfunctory, reduced to formalities on paper with little physical verification. This incident is not a one-off. The 2017 oil spill near Chennai and a chemical leak off Mumbai in 2010 both exposed severe shortcomings in enforcement and emergency preparedness. The 2011 sinking of the MV Rak, a poorly maintained Panama-flagged vessel off the Mumbai coast, revealed similar flaws. The ship had continued operating in Indian waters despite repeated warnings about its condition. Subsequent investigations pointed to inadequate port inspections and poor inter-agency coordination, failings that mirror many aspects of the MSC ELSA 3 episode. A recurring theme in these incidents is the weakness of port state control — the mechanism by which countries inspect foreign-flagged vessels in their waters to ensure compliance with international standards. Indian authorities have long hesitated to strengthen this function, allowing substandard ships to operate with impunity. The MSC ELSA 3, flagged for deficiencies during previous inspections — including one at Tuticorin last year—should have attracted far greater scrutiny. India's cargo carriage norms also deserve closer examination. While coastal trade is nominally reserved for Indian-flagged vessels, a 2018 exemption permits foreign ships to carry certain categories of EXIM and agricultural cargo without a DG Shipping licence. The ELSA 3's voyage likely qualified under these rules, but its hazardous cargo should have triggered a more rigorous inspection regime. At the very least, consignments involving reactive chemicals like calcium carbide must be publicly disclosed and centrally tracked. Fixing this ecosystem will require more than bureaucratic tightening. India must fundamentally reconsider its engagement with vessels flagged to jurisdictions known for lax compliance. This means expanding satellite tracking and Automatic Identification System (AIS) coverage, joining international efforts to monitor shadow fleets, and advocating for reform within the International Maritime Organisation (IMO). As coastal states like Kerala contend with the fallout from the ELSA 3 incident, India cannot credibly claim maritime leadership in the Indo-Pacific while tolerating regulatory blind spots in its own backyard. Maritime power is not only about naval presence or port expansion, it is also about governance, oversight, and accountability at sea. ELSA 3's capsizing may not have caused an immediate ecological catastrophe. But it has spotlighted India's chronic regulatory complacency. The next incident may not be so forgiving. Abhijit Singh is the former head of the maritime policy initiative at ORF, New Delhi. The views expressed are personal
