Is the industry over-regulated? The European Commission believes not and has deftly shifted blame back on to shipping companies for failing to properly prepare for incoming legislation
It’s a commonly held view that the European Commission is on one organisation crusade to make life difficult for the shipping industry. From its third attempt at pushing through a port services package to its early action on emissions control, there are those in some shipping camps that feel that the EC has been following its own unilateral agenda, rather than towing the international IMO line.
But speaking at the London Shipping Law Centre’s Cadwallader Debate, the EC’s head of the Maritime Safety Unit, Dr Christine Berg sought to set the record straight.
“It’s not all about control, control, control,” she said. “We want shipping to have a level playing ground and more visibility on the impact that shipping plays on all our lives.”
Dr Berg stressed that the Commission is committed to international rules, but added that complacency is “not the right approach for the development of an industry”.
“We need a fresh look at rules that have been created to see how we can have the same effect with a lighter touch”
In light of that, she explained that the regulator is focussing more on enforcement, although not at the expenses of tightening rules for the sake of tightening rules.
“We are trying to be on a continuous safety journey with the industry,” she said, explaining that the EC hopes to move from a checklist-based to a risk-based safety regime, where technology has a greater role to play.
“We are putting high hopes in technology and making a world where certain things only have to be reported once. There is a major potential in freeing up time for seafarers to focus more on the safety of the ships and to reduce the time spent in port.”
“There are some ‘hardware’ issues – such as davits and lifeboat release mechanisms – where we need effective enforcement, but in general, the next step for us is how we can positively use technology to move to a risk management approach on safety.”
Dr Berg also confirmed that the EC is looking to fight over-regulation through the “re-filing” of existing regulations. “We need a fresh look at rules that have been created to see how we can have the same effect with a lighter touch.”
While the Commission does have some sympathy for ship operators that are being hit with regulations in these economically difficult times, Dr Berg says it cannot simply ignore enforcement of existing rules that are there; but “that doesn’t mean that as a regulator that we are ignorant of economically difficult times”.
And the industry has to take some of the blame for the pain that it is feeling at the moment in relation to new regulation, she said. The latest emissions control rules are a case in point.
As of January 1, 2015, EU Member States had to ensure that ships in the Baltic, the North Sea and the English Channel burnt fuels with a sulphur content of no more than 0.10%. Use of higher sulphur fuels is still possible, but only with appropriate exhaust cleaning systems in place.
The new legislation, Directive 2012/33/EU amending Directive 1999/32/EC, was published in the Official Journal of the European Union on November 17, 2012, and the deadline for bringing Member States’ legislation into compliance was June 18, 2014. But the process goes back to 2005 when the European Commission’s thematic strategy on air pollution concluded that without further action, sulphur emissions from shipping would exceed those from all land-based sources in the EU by 2020.
“Any industry wants predictable, stable rules allowing them to make a competitive advantage and the EC sulphur rules are modelled on international rules decided in 2008. But many parts of the industry have been very complacent. This puts us, the regulator, in a very difficult position.”
The LSLC Cadwallader Debate and Gala Dinner, held in the London Savoy, marked part of the LSLC’s 20th anniversary. Debating the motion ‘This House believes that parochial policies of regional regulators will wreck international shipping’, the EC’s Dr Berg was joined by Clay Maitland, managing partner of International Registries Inc.
Mr Maitland jumped to defend the industry against Dr Berg’s claims of complacency. “I don’t think the industry has been complacent; it’s been adjusting for six years,” he said, accepting that regulation is “part of the world in which we live”. “We’re not against regulations but we are over regulated.”
He asked: “Where did it all go wrong with maritime regulation as we see it in 2014? Port State Control has been a great success, but Flag State Control has had a spottier success through no fault of the Flag States.
“I would argue that regionalism and the weaknesses with regionalism began in the US some decades ago. What the EU has done over the last few decades is to mimic the US which has created a great deal of localism which runs counter to the collective decision making of the UN as a whole and the IMO.”
Looking ahead, Mr Maitland sees the rising use of LNG as a ship’s fuel as the “biggest change since the invention of the turbine”. “That’s very important and we are adjusting to that,” he said. “The shipping world is a very different world to what it was 25 years ago; the industry does not get credit for this achievement, which I believe is remarkable.”
However a longer term issue without a solution is the loss of a strong industry ‘voice’, he warned. “I believe that our industry does not have the representative voices and leadership that it had before. As an industry we tend go around in circles. We traffic in truism and no one asks ‘what is the next big thing we need to prepare for?’ Why?”
He blamed this situation on a failure in shipping leadership, for which there is no quick fix.