An extract from The Shipping Law Review, 7th Edition

Commercial overview of the shipping industry

Shipping and port activities are of paramount importance to the Venezuelan economy, bearing in mind that the country's population (with nearly 30 million inhabitants), relies very much on the importation of bulk and manufactured goods, as well as the export of oil and steel-related products. According to the most recent estimated figures held by the national shipping registry, the domestic fleet over 500 gross tonnage (GT) comprises approximately 400 vessels totalling 1.2 million GT. The state remains as the principal shipowner, since in addition to the tanker fleet of Petróleos de Venezuela SA (PDVSA), it has acquired by expropriation Conferry, the firm in charge of transport services between the mainland and Margarita Island; and in 2011 the state also incorporated by Presidential Decree No. 7,677 the Corporación Venezolana de Navegación SA (Venavega), a shipping company serving the riverine, coastal and international seagoing market. Through Executive Decree No. 769 dated 5 February 2014, all maritime cargo transportation functions of the public administration were centralised and transferred to Venavega. Therefore, the private fleet is rather modest. A few years ago, the PDVSA embarked on a renovation and expansion programme of its fleet, to enable it to carry a significant percentage of all exports and to diversify its clients, with China at the forefront. However, this programme did not work as planned to the extent that only two Chinese-made oil tankers were added towards the end of 2013 to the Venezuelan fleet, which is currently affected by lack of investment and obsolescence. The public fleet has also been affected by lack of maintenance.

The port system involves petrochemical terminals in the east and west of the country (such as La Salina, El Tablazo, Puerto Miranda, Amuay, Cardon and José) under control of the PDVSA; bulk terminals in the Orinoco river (e.g., Sidor, Ferrominera) under the administration of Corporación Venezolana de Guayana; and the public ports (such as Puerto Cabello, La Guaira, Maracaibo and Guanta) under the control of Bolipuertos SA, a state-owned company exclusively in charge of warehouse and storage facilities. Stevedoring services within public ports, however, are performed both by this public agency and private port operators. Few private marine terminals operate port facilities. Unfortunately, no recent cargo and traffic figures have been released by Bolipuertos SA; nevertheless, because of the past rigid exchange control, devaluation and huge decline in oil prices, there has been a significant reduction in cargo volumes, said to reach 75 per cent nationwide. The construction of the Container Terminal at Puerto Cabello by China Harbour Engineering Company, at a cost of US$520 million and with the capacity to handle 700,000 twenty-foot equivalent units in its first phase, was stopped because of a lack of funds. Fortunately, the expansion and modernisation of the port of La Guaira, entrusted to the Portuguese Teixeira Duarte Consortium, has been completed and the container terminal is now open; it is operated by the Consortium.

The main shipyard and dry dock facilities are Diques y Astilleros Nacionales CA (Dianca) and Ucocar. Although these are mainly linked to the Ministry of Defence, rendering services to naval and PDVSA ships, they also serve private ships. Dianca designs, builds, repairs, modifies and maintains ships and naval structures of steel and aluminium up to 30,000 deadweight tonnage (DWT) and Ucocar up to 1,000 DWT.

General overview of the legislative framework

A comprehensive set of laws governing the maritime business was enacted in 2001. This legal framework includes the Organic Law of Aquatic Spaces, the General Law on Merchant Marine and Related Activities, the General Law on Ports, the Law on Maritime Commerce, the Fishing Law, the Coastal Law, the Law on Maritime Procedures and the adoption of the 1965 Facilitation Convention. In addition, Venezuela has adopted the principal International Maritime Organization (IMO) instruments, of which four deserve further comment.

The Organic Law of Aquatic Spaces (last amendment published in Official Gazette Extraordinary No. 6,153 of 18 November 2014) reorganises maritime administration and creates the maritime jurisdiction, setting out the general principles governing the shipping and port business throughout the country. The Law provides that maritime authority will rest with the Ministry of Infrastructure through a national body named the National Institute of Aquatic Spaces (INEA), based in Caracas, which will exercise its functions locally through the port captaincies.

The General Law on Merchant Marine and Related Activities (last amendment published in Official Gazette Extraordinary No. 6,153 of 18 November 2014) sets out the rules for the administrative regime of navigation and seafarers, activities of national ships in domestic and international waters, the general principles applicable to the merchant marine, and the coordination of the involvement in the industry by the public and private sectors.

The Law on Maritime Commerce (Official Gazette No. 38,351 of 5 January 2006) incorporates into domestic legislation the main international conventions, repealing the old maritime rules inserted in the Commercial Code. It incorporates the provisions governing aspects of private law, such as maritime jurisdiction, carriage of goods, limitation of liability, arrest of vessels and salvage, based on the international conventions not ratified by Venezuela.

Finally, the General Law on Ports (Official Gazette No. 39,140 of 17 March 2009) aims to form a national port system by introducing general principles related to the ports regime and infrastructure, governing public and private ports nationwide, to ensure coordination to consolidate a modern and efficient port system. Title IV of the Law introduces provisions related to the liability regime of port operators and port administrators, based on the 1991 United Nations Convention on Liability of Operators of Transport Terminals in International Trade; however, some of the provisions have been reviewed to adjust them to particular Venezuelan port practices, whereas others have been introduced to cover situations that the Convention does not contemplate.