Kathmandu, Mar. 6:At a time when Nepal is inching towards a new era of trade regime and practices with the proposed functioning of Inland Clearance Depots (ICDs) and much-hyped accession to World Trade Organisation (WTO), there is the strong need for sincere efforts to make the transport related insurance industry more efficient and willing to respond to the changing market needs as a part of trade facilitation process. These were the views expressed by the trade experts and government officials gathered here Monday at the seminar on Improving Transport (Marine Cargo) Insurance in Nepal. The one day seminar was organised by Nepal Multimodal Transit & Trade Facilitation Project (NMTTFP) in association with UNCTAD and Nepal Bimak Sangh.
Going by the version of Secretary at Ministry of Commerce, and chief guest of the function Mohan Dev Panta, “the legislation for streamlining the transport services is being carried out by the government and once the draft legislation on carrier’s liability is enforced the transport industry (people) will seek insurance cover in order to protect themselves from possible legal liability.”
“The new legal regimes will create liability to the transporters which needs to be duly addressed through the reforms in the insurance policies and regulations,” project director of the NMTTFP (under Ministry of Commerce) Purushottam Ojha informed the inaugural session.
With the laws on the anvil, the rolling ball seems to be in the government’s court, or for that matter, in that of the concerned legislating bodies, if the legislation in this specific regard is the only crux of the whole problem.
“That’s not all,” the participants, however, opined. In the open floor discussions that followed two working paper presentation sessions, they identified a host of problems that they believed should be properly addressed if improvement in the transport insurance were to be made as desired.
While the cargo insurance sector is awaiting for anything concrete to come up regarding the timely enactment of the legislation, the cargo insurance ‘ball’ has boomeranged back to the court of the coteries involved in the transport insurance, as the participants in the seminar ended up with a call for constituting an eleven member task force that would be entrusted the responsibility of finding solutions to the thirteen (13) point problems identified in the seminar.
The task force has been designated to submit its recommendations to the Insurance Sub-Committee of the NTTFCP, a working group set up a few months back under the chairmanship of the NTTFC project director under the Ministry of Commerce.
Those nominated in the task force are a representative from Insurance Board, K.B. Basnet, Bimal Raj Nepal and S.R. Chaudhari (all from Nepal Bimak Sangh), Sapan Dev (Freight Forwarders Association), R.B Rauniyar (Goods Carriers’ Association), B.N. Bhattarai (Shipping Line), M.K. Daga (Surveyors/loss assessors/adjusters), Rishi Lamichhane (Customs/HMG), Ajaindra Singh (UNCTAD), and an NCC representative.
Among the problems identified, the major ones were relating to legislation including Carriers’ Liability Act (reportedly now in the pipeline), and Marine Insurance Act and lack of provision of solvency margin. Similarly, difficulties in getting recovery from losses caused by carriers’ negligence, and in paying premiums and claims in foreign currencies were other hassles. Problems also were related to short delivery, loss/damage certificate issuance, pre-dispatch survey inspection, duty insurance and multiple trans-shipments. Grievances were also raised against the custom duty levied on damaged goods as well as the provisions on freight forwarders’ liability.
“Only integrated, and coordinated efforts in this regard from all concerned can solve these problems and improve the country’s transport insurance business,” the experts deduced.
Earlier inaugurating the seminar, Commerce Ministry Secretary Mohan Dev Panta said that the government would leave no stone unturned to achieve the ideal trading environment whereby our exports can become more competitive and our imports more affordable.
“With the objective of bringing efficiency in trade transactions by reducing costs associated with documentation and procedures and by encouraging better management of logistic services, the government has implemented (NMTTFP),” he added.
Highlighting the importance of the concerned regulatory authorities, president of Nepal Bimak Sangh (Nepal Insurers’ Association), Om Singh said, “These authorities must act not only as police but also need to help and guide the market players properly with sincere feeling that they have to play positive role for smooth sailing of everyone’s responsibilities.”
“In absence of explicit Compensation Act, and Carriers’ Act, our insurance industry is always in quandary,” he remarked.
The issues pertaining to insurance in general, and transport (marine cargo) insurance in particular, were dealt with in the two following working sessions.
In the first working session chaired by Om Singh, Secretary of Beema Samiti (Insurance Board) Ramesh Raj Bhattarai presented the working paper on Role of Beema Samiti as a Regulatory ody in the Development of Insurance Industry while another paper on Historical Background and Current Transport/marine Insurnace Market Practices was presented by K. B. Basnyat, vice president of Nepal Bimak Sangh.
The only working paper in the second working session came from Matthew Marshal, director at International Underwriters Association, London and International Insurance Specialist of UNCTAD, Geneva. Marshal’s paper on the Practice of Marine and Carrier’s Liability Insurance in International Market dealt exclusively with cargo insurance. Director General at Department of Customs Banshidhar Ghimire was on the chair.