Shippers, shipping agents at loggerheads again

Bangladesh Shipping Agents' Association (BSAA) and Shippers' Council of Bangladesh are at loggerheads over share of brokerage charges received from shipping companies. The dispute flared up again on August 1, which started at first in 1996.
Although the apex court found no wrong with the government decision of fixing 0.5 percent freight brokerage charge for the Shippers' Council against the service rendered by them, the BSAA is still reluctant to pay the charge as they claim they do not get any service from the council.
Following a direction of the Bangladesh Bank to the authorised dealer banks for keeping the charge deducted from the account of respective agents on August 1, the BSAA further raised the question about their mandatory payment to the Shippers' Council without getting any service from them.
Industry people said the department of shipping in a circular in 1984 said the government has decided that all shipping agents and ship-owners, including Bangladesh Shipping Corporation, have to pay 0.5 percent basic freight to the Shippers' Council in service charges in case of exporting non-jute and non-traditional items.
In this circular the central bank was also requested to monitor whether the charge is regularly paid to the Shippers' Council.
The dispute started in 1996 when eight shipping agents filed a writ petition with the High Court challenging the legal base of the decision. They demanded that the 0.5 percent freight charges should not be collected from the income of the shipping agents.
But the court's observation was that the circulars have not imposed any levy on the shipping agents. It was a mere question of distribution of brokerage. In the judgment the court said it found no merit in this rule and discharged all the rules without any order.
Then the petitioners appealed to the appellate division of the Supreme Court. But the appellate division agreed with the high court division. The bench said, as the freight brokerage charge is developed following trade practice, the government has the authority to issue circulars for proportionate disbursement of brokerage charges.
No legislation is necessary to regulate a trade practice, the court said.
Another writ was filed in 2008 after Standard Chartered Bank deducted charges from the account of Peninsular Shipping Services Ltd for the Shippers' Council according to the direction of the BB. The writ was filed challenging the legal authority of the BB for directing that sort of order. The court too discharged that rule.
Kamal Hayat, senior vice chairman of the BSAA, said there is no ground for paying service charges to the Shippers' Council, as they do not provide any service.
"The Shippers' Council has recently appointed a retired officer of the BB. With his consultation, it is putting pressure on us to pay this charge," he said.
When asked why the court passed orders in favour of the decision if their demand is logical, Hayat said: “Our representation in the court was not strong.”
He said they have no problem of paying service charge if they are really provided with service. “Charge deduction by the BB is a kind of 'state terrorism'.”
He said the country's 300 shipping agents have to pay over Tk 50 crore a year to the council as service charge.
Zillur Rahman, a deputy director of the BB, said it was a direction by the shipping ministry in 1984 to deduct charge for the council, and the central bank was directed to monitor it.
Rahman said the shipping agents went to the court several times but every time they were defeated.
“After the verdict of the court
we have written to all the authorised dealer banks to
deduct the charges for the Shippers' Council on August 1,” he said.
“We sat with the BSAA leaders twice in the last two months. They promised us to pay the charge,” he said.
Nasir Uddin Chowdhury, acting chairman of the Shippers' Council, said the percentage deducted from the basic freight is neither the money of the BSAA nor of their principals (ship-owners).
“The Shippers' Council is playing a vital role for the welfare of the shippers,” he said.
"So their claim that we do not render any service is a plane lie," he said, adding that if the money is not deducted for the Shippers' Council, it will be deposited in the account of the principals. A huge amount of foreign currency will go out from the country in this way, he said.
Jasim U Ahmed, director of Shippers' Council and BSAA, said the Shippers' Council will get 0.5 percent of basic freight as freight brokerage.
“The leaders of both the associations should sit together for a logical solution.”