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Wednesday, October 17, 2018

POINTS OF VIEW

Out of the gloom came a number of constructive and practical ways forward

When a large group of shipping people get together to discuss key issues of the day, there is often a lot said but little to show in terms of direction. This week has seen 160 shipping executives from all sectors (about half from the Netherlands) gathered in Amsterdam for Mare Forum 2003 to talk about restoring trust in the triangular relationship between shipowners, regulators and charterers/shippers/cargo owners.

What did conference chairman Michael Grey (Lloyd’s List) hope to see come out of it? “We’re looking to get a road map,” he said. Did we? Well, out of several dozen good, tight ten-minute presentations came much constructive delegate participation and a number of ways forward.

Chris Horrocks commented later on that there was a pervading atmosphere of gloom and self flagellation. There was. But not all the time. And out of the gloom came a number of constructive and practical ways forward.

The starting point was “a spiral of decline where mistrust is pretty well endemic” (Michael Grey) but with a pointer saying “if we could learn to trust each other then quality would be enhanced.”

Captain Stephen Bligh (CEO, UK’s MCA) said that “the ones who upset the level playing field are the shipowners and flag states who are out looking for competitive advantage.”

“We can’t rely on trust,” said Basil Papchrisdtidis (Chairman, Hellespont Steamship). “It’s a competitive market free-for-all and we need regulation,” he admitted … “but for all groups, not just for the shipowners.”

And the industry is getting a wave of regulation. “The regulatory and image crisis is caused by a lack of trust,” said Tor Svenson (Director, DNV). However Brian Wadsworth (Director, UK Department of Transport) believes that the tide of regulation could be slowed if there was trust in the industry.

But talking of trust, can we trust the regulators, asked Peter Swift (MD, INTERTANKO)? Why build top-quality, above-average, robust ships when arbitrarily ships’ lifespan can be cut short by the regulators, he asked? “Of course we can’t trust the regulators,” said Willem de Ruiter |(CEO, EMSA). “They are driven by the politics of the day, by the big events.” Wadsworth added that you CAN trust the regulators … to respond to the wills of their political masters, and therefore to the will of the people.

Fotis Karamitsos (Director, Maritime transport, EC) showed the regulators’ mistrust in the shipping industry when he excused Europe’s unilateral tanker regulation by claiming that the wait for a result would have been too long. Should we wait for the IMO to decide over the carriage of heavy oils in single-hull tankers and take a risk by waiting for another two winters, he asked? No, he answered. The IMO will decide in December anyway, he continued, and then “the industry will not be able to hide behind time delays.”

He added that he believes that the way forward is for the IMO to be given more power and for it to be able to move more quickly. Karla Peijs (Netherlands Minister of Transport) echoed this view when she stressed that “we cannot sit around and wait for incidents to happen … the public is unwilling to accept that accidents happen and expects its government to protect it.”

So what is seen as the way away from this damaging mistrust, and forward to something more constructive?

“Is the approach used for some (substandard) operators necessary for responsible shipowners?” asked Jacqueline Tammenoms Bakker (DG freight transport at the Dutch Ministry of Transport). She looks to goal-based regulation as the way forward based on trust, instead of method-based, prescriptive regulation based on mistrust. But she added that it is the responsibility of shipowners to earn that trust by demonstrating that what they are doing is good, safe and sustainable.

Dimitris Lyras (Director, Lyras Shipping) later reinforced this point by arguing that there will always be conflict with the legislators “because legislators have to show that they are interventionist and are putting the industry back in line.” The way forward comes from trust, born out of a demonstration of competence from a united shipping industry, he added, “a demonstration that any incident is an isolated case and that the industry is under control.”

Another part of the way forward is for all ensure that all parties carry out their responsibilities in accordance with the roles they have assumed, said Tor Svensen (Director, DNV). Stronger penalties are needed for any underperformance. And to rebuild trust, the industry needs to promote transparency while at the same time keeping itself fit, he continued. “If you’re going to be undressed in public, then you should look your best.”

But the way forward involves more than fine words and altered practices. We need a way forward that is sustainable in the long run, suggested Frederick Tsao (Chairman of IMC Shipping and Chairman of Intercargo). “We need to reinvent ourselves … The industry structure is due for re-engineering … We need a new direction to change reality … The biggest challenge is our mindset.”

There was also a strong feeling that we have to work even closer with the regulators rather than railing against them. “Let’s skill the regulators, not kill them,” said Peter Swift (MD, INTERTANKO) in the session entitled “A Shakespearean plot: First - we kill all the lawyers.” Bernard Anne (MD, BV) added “We have to help the regulators to the right decisions, with the expertise to set and enforce proper rules.

The conclusions continued upbeat rather than downbeat. “We know the problems; you know the answers,” said Ken Peters (Justice and Welfare Secretary of the Mission to Seafarers), “so fight together for your industry.”

Several speakers repeated IMO secretary general Bill O’Neil’s words from May this year “Be proud of shipping.” The message was to forget the gloom and to be upbeat and positive about the world’s first truly global industry.

50th session of the Marine Environment Protection Committee (MEPC 50), 1-4 December 2003

The 50th session of the Marine Environment Protection Committee (MEPC 50) , 1-4 December 2003, will be an interesting political session. The European Union has been the target of much negative criticism after unilaterally implementing a new set of single-hull phase-out regulations and a ban of single-hull tankers carrying heavy oils. At IMO, the EU would like to convey the impression of supporting a compromise accelerated phase-out scheme. However in reality it will look for close alignment in the implementation of an accelerated phase-out scheme by the rest of the world.

IMO has gone a long way to pacify the European Union and accelerate the legislative process by organising a special Marine Environment Protection Committee (MEPC) session in December. In spite of this the EU went ahead with its own unilateral regulation, effective from October 21 this year.

INTERTANKO is a strong supporter of IMO but is concerned that the international organisation should not have its focus blunted on developing the best possible international marine regulatory framework.

INTERTANKO understands the concern of several delegations that have pointed out that the current international phase-out scheme has only recently been introduced and that shipping needs predictability. Equally INTERTANKO is concerned that the acceptance of ths principle of age limits could engender more such regulation from IMO. An anticipation of such a trend could mean that shipowners become increasingly reluctant to contract robust and above-average specification newbuildings, and to maintain them for the long term.

INTERTANKO supports the development of the enhanced special periodical surveys (ESP) as an effective and transparent control to discourage substandard shipping and therefore agrees with the proposal that the Condition Assessment Programme (CAS), which was developed as a criterion for Category 1 and 2 single-hull tankers to trade beyond 25 years, should be applied to Category 2 and 3 ships after 15 years of age but aligned with ESP. INTERTANKO has been the driving force in making CAS a practicable tool.

INTERTANKO supports the principle of the carriage of heavy oil in single-hull tankers, but has been concerned about the lack of clarity in the definition of heavy oil and has proposed that takes into account the product’s density and kinematic viscosity, characteristics that affect the degree of difficulty in cleaning up these oils if spilled.

It is not clear how far MEPC will go to accommodate the EU. The compulsory carriage of heavy crude oils in double-hull tankers is uncertain. CAS has great support and a practicable implementation may be expected. A compromise is likely for the accelerated phase-out of single-hull tankers, but whether the so-called teenage tankers will be allowed a lifespan of 20, 23 or 25 years for the period 2010 until 2015 is hard to say.