CONCLUSIONS
OF
THE MARE FORUM .99 CONFERENCE
Amsterdam, 21 - 22 June 1999
In the opinion of the Conference organizers the following Conclusions
can be drawn from the Conference.
Introduction
International shipping, as a
service industry, should not simply be governed by price only. As a link in the
economic chain it needs predictability, reliability and performance. These
issues affect all players in the market: ship-owners, flag administrations,
classification societies, insurers, financial institutions, unions, labour and
ports etc.
The shipping industry,
however, lacks the consistent quality culture, necessary to ensure the
functioning of shipping as an efficient link in the economic chain, as is shown
by the persistent phenomenon of sub-standard shipping. Underlying sub-standard
shipping is the lack of uniform implementation and enforcement of the
globally-agreed regulations. This not only threatens the healthy development of
the global shipping industry, it also threatens safety, environmental and other
social conditions related to sea transport and increases the related external
costs of shipping - in particular to port and coastal states. Research showed
that the annual world-wide cost of vessel incidents are conservatively
estimated between $3,6 and $6 billion per year. To the Conference these figures
provided clear economic incentives to stimulate quality shipping.
It is the concern of the
conference that sub-standard shipping continues to exist, if not flourish, in
spite of the proliferation of regulations and
inspections intended to ensure that this should no longer be the case.
No doubt this continues to be an issue as profit margins decrease and the cost
of compliance with the regulatory schemes in effect will mount. Certainly
considerable progress has been made but, in the opinion of the conference, it
is not sufficient.
Clearly, in an industry where
carelessness and poor ship quality can have catastrophic consequences, clear,
intelligent and enforceable legislation is essential as well as a refined
system of control and enforcement. At the same time, companies which, in the
course of pursuing their commercial objectives, employ assets which are
inherently loaded with risk have a special responsibility to manage these risks. In the view of the conference
the dialogue between legislator and operator is essential, such also should include all parties on the
shipping scene.
Regulatory
system
The uneven track record of the
shipping industry has given rise to a wide range of legislation, much of which
has been a reaction to major accidents. In spite of the intentions, this has
not always proved effective. Many accidents do not occur due to lack of
regulations, but due to lack of compliance with regulations. In practice, there
are so many regulations and requirements that no ship in the world could
realistically be expected to comply with all of them.
The compliance with the
present prescriptive regulations and specific requirements is largely
monitored, supervised and certified by a third party. While this system
represents a high degree of accountability, it is focused on compliance and
does not offer motivation or incentives for improvements. The indications that
the industry is overloaded with rules and regulations in the present system
puts even more pressure on government efforts to enforce. Legislation and
enforcement can only be effective if supported and implemented by the industry
itself. In the view of the Conference a rationalisation of the regulatory
system through effective use of Formal
Safety Assessment is needed. The conference
calls for an end to the imposition of more regulations. The present rules and
regulations need to be re-evaluated.
The role of Governments should perhaps be redefined, with more emphasis
being placed on well defined output regulations and performance goals. More use
might also be made of the ISM and ISO approaches.
Quality
of Flag states in relation to Port State Control
The IMO has started work on
quality assurance criteria through its Flag State Implementation sub-committee.
The conference believes that this should eventually result in binding
commitments from Flag States to ensure that IMO instruments are implemented.
Consistent implementation by Flag States should be the first line of defense.
Unfortunately this first line of defense is not fully effective. In many
cases PSC, as a last safety net, is
the major enforcer of standards in the
absence of Flag State action. Effective Port State Control has done much to
raise the standards in shipping. However, Port State Control can by nature only
be end-of-the-line control targeted at the ship, while flag states can control
at the beginning by targeting the shipping company. Effective control is only
possible when both flag state and port state are performing their duties. In this
respect the strengthening of the role
of flag states is vital. One possibility of improving the performance of flag
states is the development of a Network of Quality Registers. This NQR might be
a practical solution that could sit alongside the efforts of IMO on Flag State
Implementation and tackle the poorly performing ship registers. The Network
would not interfere with issues of
sovereignty. It would provide a means whereby efficient maritime
administrations could prove their competence to the world in exactly the same
way as ship managers, shipping companies or class societies could demonstrate
their audited quality. This Network could also play a leading role in the
development and voluntary implementation of an ISM Code for flag states.
In the view of the conference
there is also room for closer co-operation between flag states and port states
with respect to Port State Control, for instance in the area of information. In
addition, there is a need to refine targeting, both to ensure that sub-standard
ships are caught in the net and that good ships are spared unnecessary
inspections.
Transparency
Transparency of information is
about the perfect accessibility of information about the ship owner and his vessels. In the view of the Conference transparency
of information will not only assist in the development of self-regulatory
schemes and their acceptance, but will also remove the veil that distance
provides for the sub-standard players and leave them with no place to hide.
Cargo interests, ship brokers, insurers, ship financiers, all noted that
transparent information on quality aspects was crucial to them. They also noted
that information had to be relevant, easily accessible and up-to-date.
With a significant increase in
ship inspection activity in the early 1990’s duplication of ship inspections
was occurring and occasionally several inspectors from different organisations
had been on board the ship at the same time seeking to carry out inspections,
addressing the same issues. Clearly, apart from the sheer inefficiency of this
activity, ship’s staff were put under considerable stress at times when the
ship was busy in port. Better co-operation between inspection and vetting
agencies is welcomed and transparent information can stimulate this
process.
All information on all ships
has to be available through a single point of contact. So that every interest
is able to access the database prior to financing a ship, buying a ship,
chartering a ship, inspecting a ship or insuring a ship. The challenge of
course will be in ensuring reliable and updated data, permitting uniformity in
interpretation and bearing in mind the different information needs (and
professional competence to evaluate and
relate to available information) of the interested parties.
In the view of the Conference
the EQUASIS project, that is being developed under supervision of the European
Commission, can evolve into the hard core of the necessary data infrastructure.
In this way EQUASIS can become the backbone of a system for self-regulation of
the industry by providing a single point of contact for transparent
information.
Self-regulation
Government has a clear role to
play in ensuring that sub-standard shipping is tackled and international
standards are effectively applied. However, sub-standard shipping exists
because there is a market. If the industry can so regulate itself to the effect
that the sub-standard operators are no longer provided with business, then
society is on its way of overcoming the problem.
At the Conference there seemed
to be unanimous agreement that a better balance could be achieved between
regulation and self-regulation. It was recognised that there is a role for
self-regulation in the shipping market. Especially because the regulatory
regime did not achieve everything it set out to do, either because it was too
prescriptive, it eliminated the scope for initiative, or it was not universally
enforced and complied with. Government and industry are both, in their own
different ways, responsible for that.
In the view of the Conference,
self-regulation offers several advantages. It can offer major incentives to
high quality operators. Solutions can be tailored to the specific needs and
characteristics of a company based on defined safety and quality standards. Enforcement should then be based on implementation and monitoring of
the individual requirements by the
company itself. The functioning of the
overall system (quality and safety) is to be monitored by a third party, either
on a voluntary or on a mandatory basis, limiting the need for direct and
duplicate inspections. Self-regulation relies strongly on the safety culture
and responsibility of the operators. Therefore methods have to be developed
which can be used as qualifying criteria.
In the view of the Conference
the concept of self-regulation will change the existing working practices in
the maritime industry. It might also change the role of classification
societies as the leading provider of third party inspections. The existing
requirements to perform inspections of the hull structure, the machinery and
the safety equipment for example will not cease. However, it will be the
company’s responsibility to set up the inspection planning and ensure that
'self-inspection' is performed regularly within the context of their safety
management system. This will require changes to the classification practices of
flag states and classification societies. A more flexible system of inspection
and verification might be the result, providing incentives for the prudent ship
owner.
This development may well lead
to an increased role of Port State Control on the one hand and classification
societies on the other hand to provide independent spot checks on the safety
and environmental protection status of vessels entering and leaving ports.
In this connection the signing
of the Maritime Industry Charter by a considerable number of sections in the
maritime industry after the conference is worth mentioning. The Maritime
Industry Charter introduced by the European Commission provides what might be
described as a strong commitment to a number of elements that constitute
“quality shipping”. In effect it may do no more than is already put in place by
the combined effects of the ISM Code and the STCW 95 improvements, but in a
public fashion, it binds together the
vessels, the owners, the customers and also other industry participants
in the common goal of high quality
shipping. Furthermore, by subscribing to the terms of the charter, industry
participants undertake to operate by the rules, and not gain commercial
advantage from any evasion of regulations or standards.
Possible
roads for the future
The stake holders present at
Mare Forum .99 (flag states, port states, ship owners, charterers,
classification societies, insurers and bankers) committed themselves to a
safety and quality culture and to transparency of information. Parties also
committed to take up their responsibility regarding self-regulation by for
instance further development of Codes of Best Practice, responsibility and
accountability for use of sub-standard vessels and co-operation to improve and
harmonise inspections regimes. New was the suggestion to develop an
"Insurers IACS". Based on transparent information differentiation in
premiums could become a powerful instrument to reward quality of safety
investments. Insurers might even establish a world-wide accessible database of
marine insurance losses.
Realising that much still has
to be done to reach the ultimate goals, the Conference decided to set up six
Working Groups for considering in
further detail, six core subjects which had been discussed at Mare Forum '99.
The issues to be considered in the Working Groups and the names of the chairmen
of these Groups are mentioned in the appendix to the conclusions of the
conference. In expressing gratitude for those who volunteered to chair the
Groups, participants at the Conference were urged to respond to the chairmen of
the Working Groups and express their views on the various subjects.
APPENDIX TO THE CONCLUSIONS
1 Working Group on Evaluation and Harmonisation of the Regulatory
System
Chaired by Mr. Gerrit Dubbeld
At the Conference
there was no doubt about IMO's role as the standard-setting organisation. The importance
of the ISM Code and STCW had in particular been mentioned. At the same time,
the present regulatory system had a tendency to overload industry. Therefore a
need was recognised to carry out an evaluation of existing rules and
regulations. Governments should, as IMO member states, shift away from the
tendency to react to each and every incident by proposing and imposing new
rules. There should be a rationalisation of the regulatory system as well as a
simplification. New regulations should be considered on the basis of formal
safety assessment. Gerrit Dubbeld, Chairman of the IMO-Council offered to chair
this Working Group.
Contact address
chairman: Ministry of Transport, Public Works and Water Management
Directorate-General for Freight
Transport
Attn. Mr. drs. G.A.
Dubbeld
P.O.box
20904
2500
EX DEN HAAG
The
Netherlands
Phone: +31.70.351.1501
Fax: +31.70.351.1548
Email: gerrit.dubbeld@dgg.minvenw.nl
2 Working
Group on Network of Quality Registers
Chaired by
Mr. Ger Nieuwpoort
At the Conference
it was considered that the Network of Quality Registers might present an
opportunity to improve Flag State performance and to distinguish between the
good and the bad performers in shipping. It was concluded that such a Network
needs to be open and non-discriminatory. It should provide a means whereby
efficient maritime administrations could prove their competence to the world in
exactly the same way as ship managers, shipping companies or class societies
could demonstrate their audited quality. The Dutch government was prepared to
work out the idea of a Network of Quality Registers into more detail. Mr.
Nieuwpoort, Head of the Maritime Transport Division, offered to chair this
Working Group.
Contact address chairman: Ministry
of Transport, Public Works and Water Management
Directorate-General
for Freight Transport
Attn. Mr. dr. G.
Nieuwpoort
P.O.box
20904
2500
EX DEN HAAG
The
Netherlands
Phone: +31.70.351.1611
Fax: +31.70.351.1692
Email: ger.nieuwpoort@dgg.minvenw.nl
3 Working Group
on Codes of Best Practice
Chaired by Mr. Chris Welsh
Shippers agreed on
the fact that companies really did see financial benefits in terms of best
practice. As more companies adopted best practice and systems, better
efficiency and better performances within the supply chain would result. They
would be able to offer a better quality service to the customer.
Key performance
indicators could be built into the system. The supply chain would need to be
analysed, and operators, shippers and intermediaries involved in the process of
determining performance. This action is in line with the Commission’s Quality
Industry Charter. The Charter rightly placed an importance on the role of best
practice by all parties in the chain as a means of encouraging the industry to
go that bit further over and above the basic regulations. The European Shippers
Council was prepared to take forward the best practice brief and make a
contribution in this particular area of the quality shipping debate. Mr. Chris
Welsh, Secretary General of ESC offered to chair this Working Group.
Contact address
chairman: European Shippers’ Council
Attn. Mr C.B. Welsh
40 Rue Joseph II
BTE 2
B-1000 BRUSSELS
Belgium
Phone: +32.2.230 2113
Fax: +32.2.230
4140
Email: esc@pophost.eunet.be
4 Working Group on Human Element
Chaired by
Mr. Peter McEwen
The Conference
agreed that quality shipping needed quality seafarers and that every ship was
only as good as the people that operated her, both onboard and ashore. All were
aware of the critical shortage of qualified seafarers facing the industry. It
was felt that not enough was done to attract sufficient young people to the
sea-faring profession. Important issues of recruitment, retention, training,
STCW and the ISM-code should be addressed more thoroughly. It was remembered
that virtually all of the organisations present at Mare Forum '99 depended on a
flow of seafarers going through into the ‘maritime infrastructure’. A shortage
on-board ship translated into a shortage of people ashore as well. Concern was
raised at the top heavy age profile of those in the maritime industry. Many
speakers had stressed the importance of quality crew to quality shipping. The
Conference would give ship-owners and crewing organisations the chance to
discuss how quality crew could be provided to run quality ships. NUMAST was
quite happy to take the lead in carrying out some work in that area in the
run-up to the Singapore Conference. Mr. Peter McEwen of NUMAST offered to chair
this Working Group.
Contact address chairman: Numast
Attn. Mr. P. McEwen
750-760 High Road, Leytonstone Phone: +44.181.9896677
LONDON E11 3BB, United Kingdom Fax:
+44.181.5301015
5 Working
Group on Inspection and Vetting systems
Chaired by Mr. Hans Payer
The conference
acknowledged that multiple inspections and vetting were counter-productive.
Inspections by charterers, Flag States, Port States, and class societies all
added to the burden of ship-owners’ and
ships crews. Discussions should start on how unnecessary duplications between industry
inspections and class inspections could be avoided. Mr. Hans Payer, Chairman of
IACS, offered to chair this Working Group.
Contact address chairman: Germanischer Lloyd AG
Attn. Mr H.G.
Payer
Postfach
111606 (Vorsetzen 32)
HAMBURG
20416 (D-20459 HAMBURG)
Germany
Phone: +49.40.36149 215
Fax: +49.40.36149 628
E-mail: pay@germanlloyd.hamburg.org
6 Working
Group on Transparency
Chaired by Mr. Willem de Ruiter
The conference had
recognised that transparency of information had a role to play in the struggle
against sub-standard shipping. The Conference had acknowledged the importance
of data in the fight against sub-standard shipping. Good decisions required
good data. More and more information about detained ships and the interests
involved was being released or contemplated for release. This transparency
should be extended to include the ship financiers, the cargo interests, the
ship brokers and the insurers. Many of these parties had participated in the
OECD Roundtable with Industry on Sub-standard Shipping in September 1998. All
had agreed that transparency of information was crucial to them. They had also
stressed that the information needed to be relevant, easily accessible and
up-to-date. Information on all ships should be available through a single point
of contact, possibly EQUASIS. All interested parties would be able to access
the database before buying, financing, chartering, traveling on, or inspecting
a ship. It is important to involve the potential users of the database, in
order to facilitate not only the use as such, but also to improve the
application of the data obtained. The European Commission was prepared to take
forward the issue of transparency and incorporate all relevant aspects in this
field. Mr. Willem de Ruiter, Head of the Division for Maritime Safety of the
EU-Commission, offered to chair this
Working Group.
Contact address
chairman: European Commission, DGVII
Attn.
Mr W. de Ruiter
Rue
de la Loi 200
B-1049 BRUSSELS
Belgium
Phone: +32.2.296.8265
Fax: +32.2.296.9066