MARE FORUM 2006

"...τα πάντα ρεί ... everything flows..."

Herakleitos 475 BC
 

 Monday and Tuesday 25 & 26 September 2006

Astir Palace Vouliagmeni (Arion) Resort

Athens - Greece

 
CONCLUSIONS

Chairman’s Notes:
Michael Grey - 29 September 2006


“Everything flowed” in a conference in which a number of interconnected themes were explored , but which was designed to assess progress made by the maritime stakeholders in recent years, and what remained still to do. There was also the overarching theme of the European Commission’s Green Paper on an integrated maritime policy for Europe, which firmly placed the shipping industry as just one element in the “common European maritime domain” along with the other sea users and those who have interests in the coastal environment , with a strong social dimension to the whole document.

The consistently strong message from both Commissioner Borg, and Director Karamitsos was that the Commission was anxious to hear from all stakeholders as to the propositions contained within the document, and it was up to the maritime industry to make sure that its views were made known. The Commission were at the “listening” stage and if the industry’s views were not communicated , it would be their fault.

And while it was clear that shipping was but one of the elements in the consideration of an integrated maritime policy, there was an acknowledgement that the sector was vital to Europe and that an attractive operating environment was necessary if it was to flourish. It seemed apparent that the Commission was always in receipt of a strong message that whatever was done in policy terms should seek to enhance and strengthen the competitive position of the shipping sector.

There is obviously widespread approval of the suggestion that shipping “needs a simpler and more consolidated regulatory regime” and as the Commissioner emphasised a stable regul;atory framework. There is also keen industry interest in the suggestions that Europe will only succeed in this global industry if its players are highly innovative, and that research and development , along with the improvement of the human capital are absolutely essential in this process.

The reduction of barriers to trade and better processes for faciltation clearly appear to be of a high priority. Intra-European shipping still suffers from over-bureaucratic customs regimes that no longer tends to handicap landside trading, and this clearly prevents the realisation of greater growth in short sea shipping. And on the whole thrust of regulation, there is clearly support for policies which subject regulations to a proper “cost-benefit” scrutiny, so that only those which are found to add value go forward. “Better” regulation emphasised rather than more regulation.

The need for “balance” is a recurrent theme in the Green paper ; balance between competing modes of transport, balance between the needs of the various parties in the maritime space, balance between the need for growth and the need to protect the environment for further generations, and other social considerations. The green paper , the Commission admits, is “provocative” in that it attempts to force proper debates about these issues.

There are clearly a number of issues which concern the shipping industry , although it is evident that many share the view that this is a necessary process and one that presents opportunities for the shipping industry, even though compromises may need to be made. Some may not share the view that there is any advantage of an optional European ship register , or accept the thought processes which see the emergence of a “Common European Maritime Space”, (with or without any revisiting of UNCLOS ) necessarily flow into the development of a European Coastguard.

Whether or not there has been misinformation about the Commission’s relationship with IMO and other international bodies, it is clear that there is some apprehension about the organisational status of the Commission in maritime affairs and the percieved “control” by Brussels of submissions to IMO, which may inhibit discussions or prevent individual member states exercising their own judgement. There is clearly shipping industry support for the principle of international rules for an international industry, and concern that regional interpretations might complicate matters.

The Commission’s concern for the human element , the employability of EU seafarers and the need for highly qualified people will be widely shared throughout the industry . The shipping industry depends upon its human capital and unless it can “sell” itself as a career to a new generation its future looks very grim.

Clearly, there are different views here over the need to “protect” European jobs, and the need to permit international manning on the grounds that such is vital to the continuing competitive abilities of European shipping. There may be some promising ideas emerging from the concept of career mapping, but some apprehansion about the difficulty of recruiting Europeans into a sea going environment which many fail to find attractive.

Finally, in the Green paper, it is clear that port policies are going to be an integral part of the whole, and that shipping will find itself handicapped if there is not a highly efficient European port infrastructure, upon which it can depend.

In summary

a. Shipping needs positive promotion and regulatory stability.

b. It needs an attractive operating environment

c. It needs international regulation,
 
d. It requires a regulatory approach that is pragmatic and not dogmatic.

e. It requires a huge new focus on the human element , to win young, better educated people for the industry- both afloat and ashore.

f. It needs new and better clean ship technologies that will help shipping hold its head up in terms of sustainability.

g. It requires a new emphasis on innovation and research and development.

h. It needs a fiscal regime that will keep an intrinsically mobile industry anchored firmly in Europe, because it wants to be there.

i. It needs sensible and practical incentives that encourage quality owners, both economic and regulatory.

j. It needs encouragement to focus upon added value, sophisticated, safe and sustainable shipping.

k. It needs recognition that shipping is a unique industry and its needs are global.

l. Regulators and industry need to work together, communicate more, develop mutual understanding and build trust.

m. Policies are needed that will see regulation be pragmatic, proactive and less reactive than it has been in the past.

In its various sessions, the conference also identified a range of constructive points that need to be addressed, not necessarily within a European context, and which relate to a number of the stakeholders

These included:

1. There are real , pressing and increasing problems facing the industry, if it is to be identified with genuinely clean and sustainable maritime transport. From the Baltic to the West Coast of the United States , the onus is increasingly upon the industry to devise technical solutions to reduce harmful emissions, pollution of various kinds and the transference of harmful organisms in ballast. Increasingly regulation and legislation is running ahead of the available technology, and the industry left disadvantaged. Urgent attention is needed to problems emanating from poor quality fuels, inadequate systems of slops and wastes disposal, and ballast exhange problems.

2. There is very patchy quality of flag state performance and at present an inadequate measure of flag state quality, which remains largely subjective. The mandatory provision of the IMO Voluntary Flag State Audit may offer solutions here, as presently, poor performers have little encouragement to put themselves forward for assessment. This, it is emphasised is nothing to do with the status of the flag, or whether it is an open, or national register.

3. The quality of life at sea (see e. above) badly needs to be addressed . Seafarers find themselves in accommodation worse than that supplied in the 1970s, and while their packages might be better in financial terms, the job itself seems often less satisfying. Issues within this category , which clearly affect recruitment and retention , include the relentless demanning of ships, length of tours of duty, the requirement for modern, affordable communications between ship and home, a more enjoyable lifestyle afloat, better relationships between ship and shore which respects the seafarer and the fact that the ship is a seafarer’s home in addition to a place of work , and the right to shore leave. These are just some of the issues which , if they are not addressed, threaten to make it even harder to obtain well educated people for seafaring services. There is some encouragement from some major maritime employers who acknowledge that multi-cultural manning and casual labour agreements are not appropriate for modern conditions, and that a close and constructive permanent relationship between employer and employee, with strong welfare and educational components is needed.

4. Associated with 3. the issue of increased criminalisation is a major threat to recruitment and retention, while the issue of over-inspection is a major problem. In the case of the latter, various positive schemes such as the US Qualship programme, and schemes in preparation by the Paris Memorandum to incentivise quality through the reduction of inspections for high quality ships is encouraging.

5. There are serious reservations about the quality and reliability of newbuildings , their equipment and machinery. With yards and manufacturers focussed on speed of production, and owners anxious to get hold of ships on schedule, quality control is being ignored, in both the components and assembly of ships. As a result, over-sophisticated ships and machinery break down, require the attentions of service engineers and fail to offer the reliability that owners feel they are entitled to. An emphasis on lightness and cheapness is having a corrosive effect on quality and the probable longevity of ships.

6. There are still ongoing concerns about the strength of scantlings, as classification societies have agreed their common rules and adopted new “goal-based” standards. There is still some confusion about what constitutes a “robust” ship , that is well designed, with adequate steel thicknesses and with a comprehensive maintenance regime.

7. There is clearly a long way to go to evolve a safe and environmentally acceptable ship recycling regime., which will be socially acceptable and protect the workers in the recycling yards.

8. The debate between public and private shipping remains inconclusive with as many detractors as proponents of the capital markets as a suitable source of funds for the shipping industry. Loss of management control would seem to be a major problem in the public company, with investors too anxious to pressure management to make short term decisions in a cyclical industry.

Michael Grey - 29 September 2006

 

The Speakers

Michael Grey
Conference Chairman, Columnist Lloyd’s List

Ioannis Tzoannos,
Secretary General Ministry of Mercantile Marine, Greece

Joe Borg
EU Commissioner Fisheries and Maritime Affairs

Leonidas Dimitriades-Eugenides
Member of the Board of Directors
Union of Greek Shipowners

Antonios Vidalis
Member of the Maritime Policy Task Force, European Commission

Roberto Giorgi
CEO V.Ships

Harris Vafias
CEO, StelthGas Inc.

Jannis Platsidakis
Chief Executive Officer
Anangel Shipping

George Gourdomichalis
Chairman & President FreeSeas Inc.

Sergey Burima
General Manager
Chartering, Fleet Management and Operations, Sovcomflot

Mauro Balzarini
Managing Director, SIBA ships

Geert Dokter
Managing Director, MPC Münchmeyer Petersen Steamship BV

George Economou
Chairman DryShips Inc.

Nikos Varvates
Chairman, Naftotrade Shipping and Commercial SA
Chairman of the Union of Short Sea Operators in Greece

Larry Howard
Chairman of the Department of Global Transporation and Business State Universtiy of New York, Maritime College

Paul Markides
Director, Oil Companies International Marine Forum OCIMF

Jeffrey G. Lantz
Director of Standards, Prevention Directorate
US Coast Guard

Ken McLean
Director and Chief Executive
The Bahamas Maritime Authority

Rajaish Bajpaee
President, The Eurasia Group of Companies

Erik Bartnes
Member of the Board, Pareto

Alan Gavin
Marine Director Lloyd's Register

Anthony Zolotas
Managing Director Eurofin

Paul Leand
President and CEO AMA Capital

Paul Slater
Chairman, First International Corp

Basil Mavroleon,
Managing Director, Charles R. Weber Company, Inc. USA

Bote de Vries
Head of Investment Management and agent of
Navigation Finance Corporation and Deucalion Aviation Funds

Robert C. Somerville
Chairman and CEO American Bureau of Shipping

Bernard Anne
Managing Director, Bureau Veritas

Ugo Salerno
CEO RINA