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N. K. Kurup

“It’s a great….great victory for Indian seafarers. Our men fought for it nearly five years,” said an excited Abdulgani, leader of the seamen’s union, NUSI.

Abdulgani had reason to rejoice. The government has just recouped the entire sum of Rs 92.78 crore that the Seamen’s Provident Fund (SPF) had lost in the 2002 securities scam. NUSI had been agitating for this over the past five years, even forcing shipping lines to move the court against unions disrupting shipping service.

Mr Gani, who took full credit for the government’s “ unprecedented decision,” now plans to write a book on the union’s five-year-long struggle to get back the seafarers’ hard-earned money which was “ swindled by a couple of brokers in collusion with the government-appointed provident fund commissioner.”

Though the government had agreed to make good the losses, nobody expected that the entire amount would come directly from its kitty; the money was paid from the Government’s Contingency Fund. Confirming the receipt of money from the Government, SPF Commissioner Mr Bhumesh Chandra said, with the shortage in the fund being covered, the SPF would now be regularised. There is also a move to start a separate pension fund for seafarers, he said.

While the seamen’s union celebrated its victory, shipowners heaved a sigh of relief. “We are happy that seafarers got their money back. But more than that we are relieved as we were being penalised for no fault of ours,” said Mr S. S. Kulkarni, General Secretary, Indian National Shipowners Association. When unions resort to agitation for whatever reason, shipping companies are the first to be hit. And in the case of recouping the SPF loss, shipping companies were also worried that they might be asked to share the burden, as there were suggestions to this regard, said Mr Kulkarni.

In the last five years, the Government could have hardly recovered anything from those found guilty. The SPF Commissioner had invested the PF money in securities through brokers, in violation of the government norms. The Commissioner had records of investments but the physical securities were missing.

Immediately after the fraud was detected in 2002, the government had taken some immediate action — sacked the SPF Commissioner, ordered a CBI probe, reconstituted the board of the SPF and tightened investment norms. The Shipping Ministry had also worked out two or three alternative schemes to make good the losses. But, somehow, it could not get all stakeholders — unions, government and shipping companies — to agree to even one of them.

NUSI had, in the meantime, announced a strike demanding recouping of the shortage in the SPF account, but it was deferred following an assurance from the government.

Subsequently, the Kolkatta based rival union — Forward Seamen’s Union of India (FSUI) , also decided to go on a strike for securing the same demand and served a strike notice on shipowners’ association INSA and others. Fearing the repercussions of a strike at a time when the freight market was booming, INSA had sought a stay on the strike.

After the case was admitted for hearing, NUSI also joined as a party to the case. In the meantime, the Union Cabinet took a decision to recoup the SPF loss, but as a one time measure, after making an amendment to the Seamen’s Provident Fund Act,

Strictly speaking the government had no legal obligation to make up the SPF losses. There could have been a moral responsibility as the fund was managed by a Commissioner appointed by the Government and its auditing is done by CAG.

In any case, it is a government gesture that will bring smiles to the faces of thousands of seafarers. It was their hard-earned money that was lost. But the question is whether this unprecedented decision will set a precedent for similar cases in the future.

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