Keynote Address given at Mare Forum 99
Amsterdam, The Netherlands

Ms Tineke Netelenbos
Minister of Transport, Public Works and Water Management , The Netherlands

Monday, June 21st 1999

Ladies and Gentlemen,

As a maritime nation, the Netherlands has always shown a strong commitment to shipping. Each year there are nearly 300 thousand ship movements in our coastal waters, and some 55 thousand ships call at our ports. We consequently have a keen interest in promoting safety and quality in shipping.

As shipping is the most international of industries, this can only be achieved through concerted international action, by such international bodies as the IMO; by administrations; and by the global maritime industry as a whole.

Mare Forum ’99 is a major initiative, with a clear goal. I am sure you will all agree with me that this conference should aim to deliver measurable improvements in the performance of flag states and the maritime industry.

I know this aim is ambitious. But it is not impossible, and today is a chance to take steps in the right direction.

This conference is not an isolated event. It forms part of a series of sessions which started in Rotterdam at Mare Forum ‘96. And I am pleased to inform you now that Mare Forum '99 is not the end of the sequence. Singapore and Australia have expressed their willingness to organise the next events, a gesture that I highly appreciate.

Allow me to say a few words about where we stand today, and what problems we are facing. The shipping industry's overall performance has certainly improved in the last decade, and there are parts of the industry have clearly shown good performance. Unfortunately, as Mr. Marshall has made quite clear, the unacceptable phenomenon of substandard shipping remains a reality. And it is more substantial a problem than many people think, despite our efforts to eradicate it.

Maybe our existing measures are alleviating the symptoms rather than addressing the cause. Please let me explain this. In our Port State Control initiatives we inspect vessels and punish the shipowner if we find fault with his ship. He is the one who is usually held accountable for substandard practices.

But the guilt is more widespread. The shipowner doesn’t work on his own. He operates within a system of sub-standard flag states and users of substandard shipping, backed up by brokers, shippers, insurers, classification societies and bankers. Are they really ignorant of the fact that they are colluding in the employment of a substandard ship?

No they are not. In many cases the real cause of substandard shipping is facilitated by the unwillingness of some players in the industry. They are driven by the lure of cheapness and market share to finance, insure and employ vessels of poor quality. They think that the financial gains make up for the risk of interception.

Moreover, these users of substandard ships know that when a vessel is caught by a Port State Control inspection, and detained for serious deficiencies, it is the owner who suffers. Others involved can escape without penalty. The vessel's cargo will be discharged. No action will be taken against the broker, the shipper, the insurer or any other user of that vessel. The same applies to those who licensed the vessel by issuing its certificates and who have failed to properly supervise its operations.

So I think that we need to devise administrative measures. Measures that on the one hand result in economic incentives to employ quality shipping, while on the other hand will discourage the ‘black sheep’ of the shipping sector.

I think that we have to discuss in depth three main elements at this conference, if we ever want to find answers to these questions. Surely, these answers are not easy to find. The problems are complex and I will not endeavour to give you any detailed answers here and now.

However, there is one word which might set the tone, and that word is dialogue. A dialogue between regulators, flag states, port states and the maritime industry. A "decisive dialogue"! For this discussion I would like to suggest three points of attention which are crucial, if we are to succeed in our common goal.

Firstly, we need far more transparency of information in the shipping industry. This is an absolute necessity for greater recognition of quality shipping and quality ship registers.

Transparency also helps to identify substandard operations and flag states that are not playing their part. It will help reveal those who operate ships of poor quality, those who employ them and those who provide the insurance. Then we can hold those who employ substandard ships accountable for their actions, as they will no longer be able to hide behind the cloak of ignorance.

More transparency also enables us to improve the effectiveness of Port State Control. If we know which ships maintain lower standards, we can more effectively decide which ships to inspect. This means more - undoubtedly unwelcome - attention for substandard ships. And better ships will move more freely, because they will be under less strict scrutiny.

Of necessity, the information should be reliable and consistent, readily available and properly fashioned, so as to avoid endless argument. I know this is not easy to realise, but I hope all here today would agree that it is a worthwhile objective.

The second main point of attention is the regulatory framework. This needs to be evaluated and rationalised. Governments in the IMO have created an almost endless series of rules and regulations. Of course they were genuinely meant to improve safety and environmental protection. Unfortunately, however, there has been a tendency to overcompensate for insufficient compliance by creating yet more new rules. While this is perhaps understandable, the unfortunate consequence is further economic incentives for the unscrupulous rule-breaker.

As the Secretary General of the IMO indicated last year, the IMO is now conscious of these undesirable side effects of further regulation. That is something I welcome. But the IMO can’t do anything without the commitment of its member states. So it is up to us, as members of the IMO, to act. We don’t need new rules. What we do need is to make sure that relevant rules are observed and enforced.

Therefore we must evaluate and rationalise our rule-making system, in partnership with representatives of the industry that have consultative status in the IMO.

And we should seriously concentrate on obstacles to compliance and look more closely at our obligations as flag states. In most of IMO's Conventions the onus of compliance is placed with the provisions on the flag states, and this is quite right.

Therefore, it is particularly unfortunate that too many flag states show a lack of direct involvement. They might provide for ship registration, but their maritime administrations conspicuously fail to live up to their obligations under IMO Conventions, when it comes to ensuring the quality of ships on their registers. There have been a number of initiatives aimed at improving the performance of flag states and I am grateful for the progress being made in IMO’s Flag State Implementation Sub-Committee. But I think we can do more.

I hope that you noted the Netherlands’ idea for setting up what might be called a "Network of Quality Registers". A text about this idea is included in the documentation you received during the conference.

I very much hope that you will give us your reactions to this idea. I appreciate that most of you will not be in a position to do more than give us your initial reactions. But even this would be most welcome at this stage. If we get a sufficiently positive response, we might discuss the concept more fully at a separate conference. Which my government would be happy to organise.

I believe the ideas underlying the proposed Network can help us to improve flag state performance. Flag states belonging to the Network show that they have nothing to hide. I believe the network could reinforce the IMO’s mission for "safer ships on cleaner seas". In particular it would support IMO efforts toward Flag State Implementation. This is why I believe that it would be a valuable initiative. But that is our view, we need to have yours.

I wish to emphasise that this Network is not discriminatory, nor is it intended to establish an "elite club" within the IMO. Nor would membership of the Network threaten sovereignty. Nor would co-operation through the machinery of the Network threaten competition between members.

The Network would be open to every Register that is willing to voluntarily demonstrate its commitment to quality. It would be a chance for flag states to show that they live up to IMO standards. And that the working and living conditions on the ships of their registers are in compliance with ILO Conventions.

Participation in the Network would be a clear signal to the maritime industry. A signal from flag states that they play their full part in the joint effort to eliminate substandard shipping, in an open and accountable way.

I know that a lot still has to be done if we ever want to realise the benefits which I believe such a Network of Quality Registers could bring. We would need to determine criteria for participating in the Network, and to develop a mechanism for auditing. We must also consider to what extent we shall report and relate matters to IMO.

We would also need a methodology for substantiating the desired "openness", "accountability" and other relevant aspects.

This would be a challenge. But I believe a Network of flag states as I have just outlined could be very effective.

It could help drive a clear wedge between the poor performers and the good practitioners, both in shipping operations and the operation of flag states. With the Network we might substantially diminish the number of substandard operations while rewarding those who maintain quality with suitable incentives. This would definitely help improve the general standard of shipping.

The third element which this conference will tackle is the question of whether there can be a better balance between governmental regulation and self-regulation. I believe that this can be achieved.

However, this better balance can only be found if we are willing to recognise the fact that both the maritime industry and governmental regulators tend to have their own blind spots.

The industry is understandably trying to optimise its own interests. Oftentimes short-term commercial interests predominate. The long-term consequences of substandard shipping are too often ignored.

On the other hand, I acknowledge that when governments ask the industry to live up to codes of conduct, these governments have to create a climate in which the industry is encouraged to implement self-regulation. For its part, the industry can rightfully ask flag states to live up to all their responsibilities under the IMO Conventions, thus creating a level playing field. Then quality shipping will have a fair chance.

That is why I am asking the conference to consider the merits and possibilities of our idea for a Network of Quality Registers.

Ladies and gentlemen,

This conference is a chance to improve the quality of the maritime transport market. It is not an easy task, but it is a historical one. Substandard shipping is a form of unfair competition that is catastrophic in the long run. It harms the interest of respectable parties in the shipping industry, endangers the lives and well-being of ship crews, and threatens the ecology of our seas and oceans.

For these reasons I ask for the honest participation of everyone present. Because the people that can make a difference are gathered here. And industry and governments can - through joint effort - succeed in eradicating substandard shipping, and making quality shipping more profitable. I hope this conference will be a demonstration of this unity. Thank you for your attention.