Charting Troubled Waters

From an article published in The April 2004 addition of
"The Navigator - The Voice of the Marine Industry" Vol.7, No.4

By Darrin McGrath

There is an on-going dispute in Canada over the sale of digital chart data that stands to affect fishermen and recreational boaters. The situation is a complex but a simple version reads as follows.

About ten years ago Nautical Data International (NDI) of St. John’s won a contract from the Canadian Hydrographic Service (CHS) to digitalize marine chart data. When electronic charts were new, the Federal Government had no way to distribute such material and so entered into an agreement with NDI to digitalize and distribute charts. At the time, NDI was the only company interested in pursuing this work and it has an exclusive arrangement with the CHS that lasts until 2008.

Greg Mercer is Executive Vice-President of NDI. He says that it took 60 NDI employees, working in three shifts, twenty-four hours a day for almost four years to complete the digitalizing process. He is proud that many NDI employees are former fishermen who retrained under the NCARP program. "This is a good example of a private-public partnership that is working. NDI digitalized the charts at their own expense and saved the Government of Canada millions of dollars over the years. As part of the agreement, NDI updates the charts every month, the CHS then does a quality check on it and releases the information," Mercer explains.

If some boater or fisherman buys a digital chart through a supplier, that supplier must pay a royalty fee to NDI - Therein lies the problem.

Two companies, namely C-MAP and Navionics, are refusing to pay royalties to NDI. Both C-MAP and Navionics are worldwide electronic chart manufacturers. They had negotiated with NDI over settling on a royalty rate. But these negotiations have thus far failed.

Mercer says that NDI’s priority is to reach an agreement with these other companies and he is concerned about new customers who are purchasing electronic chart plotters. "If a fisherman is purchasing electronic equipment, they need to make sure before they spend thousands of dollars that they system is available," Mercer says.

For Mercer, the dispute is cut and dried. NDI has the Federal Government contract to distribute digital charts and the other two companies are not abiding by the Canadian copyright laws. 

According to Bill Coady, Director of the Marine Electronics Group with CMC Electronics in St. John’s, the whole issue came to a head at the beginning of this year when the CHS sent out a notification concerning the sale of digital marine charts and the Canadian Copyright Act. Coady stresses that he doesn’t want to take either side in the debate but as a supplier of marine charts his business is suffering and he is quite concerned that the fishing season is almost upon us. "Charting affects 25-30 percent of the equipment CMC sells. I don’t want to inflame either side but I want this settled," Coady says.

Con Dunphy is the Manager of Atlantic Electronics Ltd., and like Coady he is not taking sides but he wants this dispute settled. "We need someone to step in and intervene. Why can’t DFO have an independent arbitrator/mediator bring it to a conclusion," he wonders. Dunphy says that about 15 percent of his business involves the sale of chart plotters that use these electronic charts. Dunphy has gone as far as to write John Efford and ask him to get involved in brokering a solution. 

Jim Miller is well known to Navigator readers as a pleasure craft broker and writer. He waded into the chart controversy and came down squarely on the side of NDI. "This is like buying a computer and not being able to buy the software. NDI had the original contract to digitalize charts for CHS. NDI devised software to do this. They can charge a royalty on digitalized charts," Miller says. As far as Jim Miller is concerned, the whole situation is an example of two big international companies trying to push the little guy (NDI) around. 

The Navigator attempted to contact the vice-president of C-MAP company, Ken Cirillo. However, he did not return our phone calls. The C-MAP side of the story can be found on their website where they have posted a series of questions and answers about the controversy. 

On March 2, C-MAP and Navionics issued a joint statement to the public stating that "C-MAP and Navionics are sorry to report that negotiations with NDI, the sole representative of the CHS have failed." 

The statement went on to claim that "if NDI is left to impose its prohibitive royalty rates, Canada may end up seeing deterioration of electronic charting products and services...likely to result in reduced safety of navigation."

The Navigator also put in a call to Denis Haines of the Canadian Hydrographic Service in Ottawa. This call was returned by Steve Outhouse, spokesman for the Department of Fisheries and Oceans, of which the CHS is a part. 

"The DFO’s position is that we have a contract with NDI which expires in 2008. So legally, we have to deal with NDI. This contract was done properly and to break it would leave the government open to be sued. It is up to various companies to ensure that they are operating within the law," Outhouse says. 

He goes on to say that the CHS and the DFO are receiving lots of calls and e-mails about this matter from people who have purchased electronic charts. "There is pressure on the Government and some see it as the Government not letting people access the information. But the material is there and must be accessed through NDI," Outhouse says.  

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