New Shippers’ Authority law expected to enhance Ghana’s international business climate

The Ghana Shippers’ Authority Bill, which has been approved by Parliament, is on the verge of receiving Presidential assent and becoming law.

This law will clothe the Ghana Shippers’ Authority with the powers to regulate shipping service provision within the country.

Emmanuel Kofi Arku, the Director of Business Development and Commercial Services at the Ghana Shippers' Authority, stated during a televised discussion with Eye on Port’s Kennedy Mornah that this transformative piece of legislation will significantly improve the shipping industry in Ghana and fulfil the Authority's mandate.

Outlining the key provisions of the new law and the anticipated positive impact on the sector, on the niche television program, Mr. Arku explained that the new legislation brings together the establishment law, NRCD 254, and two key legislative instruments—LI 1347 and LI 2190—into a single, comprehensive legal framework.

The new bill introduces more robust sanctions to ensure that long-standing industry issues, particularly illegitimate charges and disputes between shippers and service providers, can be dealt with decisively, he said.

He emphasized that while the authority has been addressing some of these challenges, the absence of legal authority to enforce decisions has hindered their efforts.

According to Mr. Arku, one of the most significant provisions of the new law is the Authority's newly granted power to conclusively address unfair shipping charges. Under the previous legal regime, the Ghana Shippers’ Authority could highlight and negotiate disputes over unjustifiable fees but lacked the legal muscle to impose final determinations.

The new law, he said, changes that, empowering the Authority to approve or reject charges that do not conform to international best practices.

“This will help prevent the imposition of arbitrary fees on shippers, a situation that has plagued the industry for years,” he said.

He cited examples such as “administrative charges” and “container cleaning fees,” which have become common yet unjustified expenses for shippers. Administrative fees, Mr. Arku explained, are often levied by shipping agents at ports even when they do not reflect any actual services rendered.

"You bring in clean cargo, yet you are still charged for container cleaning,” he said. “Shippers are paying an excess of $20 to $30 million a month in these unjustified charges, money that could otherwise be reinvested into their businesses," he averred.

Another key element of the new law, he said is the introduction of a dispute settlement mechanism. Under the new framework, the Ghana Shippers’ Authority can make binding pronouncements on disputes between shippers and service providers, ensuring that business continues to flow smoothly.

Previously, prolonged disputes would result in significant delays, with containers accruing demurrage and other charges while conflicts remained unresolved. Mr. Arku noted that the new law will allow the Authority to settle disputes swiftly, with any determinations standing until overturned by a competent court.

This provision, he said, is designed to relieve shippers from being "on the shorter end of the stick" when disputes arise, and it is expected to promote smoother operations in Ghana’s ports, as well as land and air trade points.

A notable change introduced by the Shippers' Authority Bill is its emphasis on promoting local content and participation in the shipping services sector.

Mr. Arku pointed out that the Ghanaian shipping industry has been dominated by multinational corporations, leaving limited space for local businesses to thrive. He recalled that when he first joined the industry, there were several local shipping agents.

However, over time, multinational shipping lines have taken over, establishing their own agencies and even moving into other services such as transport and clearing.

The new law aims to reverse this trend by encouraging greater local involvement in the shipping services value chain, he said.

"Very soon, we will come out with legislation and regulations that will allow our people to take charge of some of these areas," he said, expressing hope that the local business community would welcome this development.

The new law also mandates transparency and accountability in the determination of port fees and charges. Mr. Arku emphasized that any charge imposed on shippers must now be justified and backed by thorough consultations. This provision aims to ensure that shippers are not burdened with arbitrary fees, and all increases must also undergo rigorous review processes.

He referenced specific instances where shippers have been asked to pay administrative fees that had no clear justification. The new bill, he assured, will prevent such practices, ultimately saving Ghanaian businesses millions in unjustifiable charges.

Addressing the potential for resistance to the new bill from shipping lines, Mr. Arku acknowledged that not everyone in the industry would be pleased with the changes.

"Those who benefitted from the previous system definitely will not be happy," he remarked, but stressed that the new law has been designed in the best interest of the shipping community, and the Ghana Shippers’ Authority now has the legal teeth to enforce compliance.

He noted that some concerns had arisen, particularly from local trade associations such as the Ghana Union of Traders Association (GUTA), regarding certain aspects of the bill, including the registration of shippers and shipment notification forms. However, after discussions, these stakeholders now have a clearer understanding of the law’s provisions, he said.

He assured that the Authority is committed to ensuring that the law’s implementation does not impede trade or add to the cost of doing business.

The Director of Business Development and Commercial Services at the Ghana Shippers’ Authority expressed optimism about the potential of the new Shippers’ Authority Bill to enhance fairness, transparency, and local participation in Ghana’s shipping industry, ensuring that both shippers and service providers operate within a regulated and competitive environment.

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