The dispute over the 'change of title' in the Bill of Lading (BoL) has hit a deadlock and the ball is now in the court of Ministry of Commerce (MoC) and the State Bank of Pakistan (SBP) as several rounds of 'sustained dialogues' between exporters and international shipping lines and their local agents and the freight forwarders made no headway.
As the lingering dispute with exporters intensified, the international shipping lines and their agents and freight forwarders on Friday termed the circulars of the SBP, regulating matters pertaining to the issuance of BoL, as contrary to the global seaborne trade agreements and, therefore, legally and practically not executable.
In a joint press conference at a local hotel, Pakistan Ship Agents Association (PSAA) and Pakistan International Freight Forwarders Association (PIFFA) rejected the "allegations" made by some individuals of one or two textile downstream export associations about the 'change of title' in the House Bill of Lading as a gross misunderstanding.
PSAA was represented by its chairman, Captain Nusrat Iqbal, former chairman Muhammad A. Rajpar and Secretary General, Amir Ali Jamal, while Tariq Mehmood Chaudhry, chairman PIFFA and Babar A. Badat, PIFFA's founding member, represented the freight forwarders in the briefing.
The two sides are said to have been quarrelling for months with the exporters, accusing the shipping lines, their agents and the freight forwarders of violating the Foreign Exchange Act, 1947 and the SBP's Circular No 6 (2006) with regard to the issuance and delivery of BoL and the latter rejecting the claim as mere allegations.
"The stakeholders held some half a dozen meetings during the last six months but the negotiations deadlocked over the basic difference of title change" in the BoL, sources told Business Recorder on sidelines of Friday's press conference that came in response to that of the exporters' on the 6th of this month. They said that the matter has now gone to the government, for final settlement, with the MoC and the State Bank being the concerned entities.
Earlier, PSAA's ex-Chairman Muhammad A. Rajpar told the briefing that almost a million containers, containing a host of products, were being exported from Pakistan annually all over the world without any complaint of such malpractice. The defaulting exporters were trying to shift the burden of their "sins" onto the shipping and freight forwarding industry, he claimed, adding that Pakistan Apparel Forum and the Pakistan Hosiery Manufacturers' Association had failed, despite repeated reminders of the PSAA, to submit/send even a single case of mis-delivery.
"Indeed, the real issue is that these exporters are unable to negotiate their transactions with their buyers on equal footing, succumbing to their nominated logistic requirement, even to the extent of consenting to release of cargo without surrender of Original Bill of Lading and then crying over spilt milk," the shipping agent said.
Addressing the media in the absence of PIFFA Chairman, Tariq Mehmood, who had arrived when the briefing was over, Babar Badat, PIFFA's founding member, said as per the established international best practices, the title of ownership of goods was never changed on the carrier's Master Bill of Lading (MBL) against the forwarder's HBL.
About exporters' reference to 'Bangladesh model', he clarified that most of the global buyers were sourcing their merchandise from Bangladesh using the HBL, which was commonly used and negotiated by the relevant banks in the country. According to him, in a few cases, only one PIFFA member had issued around 6-7 HB/Ls as per FE Circular 6 of the SBP in an understanding with the exporters, which could not be treated as a representation of the whole trade as referred by Pakistan Apparel Forum at several occasions.
"However, the shipping lines have already resolved that FE Circular 6 of 2006 is impractical," he added. In separate handouts made available to journalists, the two associations claimed that the SBP's FE Circular No 6 that deals with the issuance of BoL was not applicable to the international seaborne trade's framework applicable to the Contract of Carriage of goods by the sea.
"The circular is... impractical, contrary to international best practices and international forwarding law and in any case attempts to impose rules and regulations on exports which are meant to apply beyond the territorial and jurisdictional limits of Pakistan and hence is both legally as well as practicably not implementable," the statements said.
According to the handouts, the two associations had submitted their recommendations to the central bank, asking it to review the FE circular. "In fact, in case MBLs are issued in line with the circular, shipping laws, International Treaties and the contractual provisions applicable to the Bills of Lading, and would trigger a breach of the agency agreement between a shipping line and their local agents," reads the statement.