Having fulfilled its commitment and paid wages to its seafarers till 30th July, Varun Shipping succeeds in buying time
The Maritime Administrators’ axe scheduled to fall on Varun Shipping Company Ltd. has been stayed, with the company having now cleared all back wages of its employees until July end of this year as directed by the Director General of Shipping (DGS), government of India. Varun Shipping was issued a notice by DGS on 29th October, 2013 with a warning that it would withdraw its ‘Documents of Compliance’ (DOC) if it continued to operate ships without paying wages to seafarers and without adhering to statutory provisions that threatens the safety of its ships.
The notice of the Directorate has been like the Damocles’ sword hanging over Varun Shipping’s fortunes. The economic recession has already taken a heavy toll of some prominent shipping companies which having been unable to pay back wages has eventually lost the license to operate their vessels. In the case of Varun Shipping after the notice was issued there was apprehension about whether it too would go down like other shipping companies including Pratibha Shipping and Jasu Shipping against whom the DGS has taken stringent action.
Given the company’s financial position, the show-cause notice would have resulted in laying up most of its vessels. Once a company loses its DOC, it also loses its insurance cover virtually leaving the company in the doldrums.
Varun Shipping, a leading Indian private shipping company owns and operates vessels in the hydrocarbon sector. A global player in energy transportation, offshore exploration and production support services, it is the fifth largest in the world going by the size of its fully refrigerated LPG carriers and the seventh largest overall LPG ship operator by cargo-carrying capacity. Its LPG carrier fleet is the largest in India by fleet size and cargo-carrying capacity under 10,000 + CBM category. The company owns and operates a fleet of 20 vessels, comprising 10 LPG carriers, 3 crude oil tankers and 7 Anchor Handling Towing and Supply (AHTS) vessels. Five of the AHTS are large, modern and powerful vessels with the highest bollard pull under Indian flag. It has established a leadership position in the large AHTS sector in the Asian region. In fact, Varun is the first Indian company to operate large AHTS vessels in the North Sea.
Abdulgani Y. Serang, Secretary General of National Union of Seafarers of India, which has been instrumental in bringing about the settlement, said, “Varun Shipping has not been paying wages to seamen on some vessels for almost ten months. The DGS had given the company enough time to honor its commitments. This was viewed as a threat to the safety of ships and seafarers’ lives. We wish to inform that as committed Varun Shipping have now cleared all its pending dues till July, 2013. NUSI and Maritime Union of India maintain that seafarers should receive their wages on time and non-payment of wages is not acceptable. We are happy to note that, though late, the seafarers of Varun shipping have received their pending wages. We hope that such situations do not arise in the future and the seafarers continue to get their wages on time.”