MRAI acknowledges 'very testing times' at Indian ports

MRAI acknowledges 'very testing times' at Indian ports

Trade association urges buyers, sellers and shipping lines to work together and adhere to contracts.

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The Mumbai-based Material Recycling Association of India (MRAI) has issued a statement acknowledging “very testing times” for scrap traders doing business in or with India. The group also urges buyers, sellers, shipping lines and port authorities to communicate and work together to find the least financially painful solutions.

In a five-point advisory authored by MRAI Secretary General Amar Singh, the first point addresses the crucial aspect of adhering to contracts. “Both sides, i.e. suppliers and buyers (including agents), remain obliged to fulfill their contractual obligations,” writes Singh. He adds later in his advisory, “Please note that decisions made today will be the basis of future relationships.”

Singh summarizes the situation in India—where a sudden lockdown was imposed and then extended by Prime Minister Narendra Modi—by writing, “We are going through unprecedented and [some of the] most challenging times that mankind has seen. Whilst we have to first ensure safety and good health of ourselves, and our loved ones, it is also important that our businesses remain safe and survive the economic blow which COVID-19 has unleashed.”

In the scrap sector, writes Singh, “Our businesses [have] remained exposed to several uncertainties and anxiety of what would come along. We at MRAI [are] working around the clock, with all stakeholders, including government, importers, traders/agents, etc., to minimize the economic impact of this unforeseen crisis.”

In addition to addressing the importance of living up to contracts, Singh listed these four points in the MRAI advisory:

  • “The disruption caused by the pandemic may create hurdles towards smooth execution of contracts, as services like shipping, transport, banking, courier companies, etc., get temporarily impaired or affected. Whilst buyers and suppliers should remain compassionate, and mutually accommodate each other to the extent of disruption, they should not exploit the situation for undue commercial gains. Successful completion of contracts needs to be endeavored in intent, spirit and action.
  • "Whilst MRAI is in touch with local, state and central government departments on a daily basis to prevail upon on shipping lines and container freight stations (CFSs) to extend free container detention periods and port demurrage—for the lockdown period plus a reasonable additional days to clear the backlog—it would also be requested to importers to push directly at destination ports (In India), and for liners and CFSs to give such relief. Once again, such costs should not become a basis for nonfulfillment of contractual obligations.
  • "Suppliers and buyers need to cohesively work together in solving disputes, arising out of contract related issues, including shipment delays, payment delays, etc. Whatever changes, considerations, negotiations or settlements are made in the original terms between contractual parties, they should be based on their own judgments. However, please note that decisions made today will be the basis of future relationships. We at MRAI would urge the trade to take all necessary precautions when entering into contracts, including that of arbitration, mediation and legal jurisdictions thereof.
  • "It is urged that contractual parties discuss amongst themselves and solve contentious issues, if any. However, if unable to find a solution, MRAI’s Mediation Committee can intervene on behalf of member companies—subject to all concerned parties unconditionally accepting to use this as a medium of settlement. In such cases, all processes and costs must be agreed to beforehand.”

Both the Brussels-based Bureau of International Recycling (BIR) and Washington-based Institute of Scrap Recycling Industries (ISRI) have mentioned India as a current trading trouble spot, in part because its government has not recognized recycling as an essential industry or recyclables as an essential good to be handled at ports and in the transportation chain.

Concludes Singh of the MRAI, “Once again, these are very testing times for all of us. We must ensure that we remain united, and hand-hold each other to see this period through. Our industry has truly evolved and grown because of our camaraderie and hard work. Let’s ensure that this spirit prevails. In the interim, please stay safe and healthy.”