ICS concerned by regulatory reform

Representatives of ICS member national shipowners' associations, from the Americas, Asia and Europe, reviewed the many significant regulatory developments affecting shipping with respect to safety, environmental protection and employment affairs, as well as various legal, insurance and trade policy developments.

The discussions were dominated by the pressing challenges associated with the need for ships trading to emission control areas (ECA) in North America and Europe to switch to low sulphur fuel, as well as the serious implementation problems that will be created by the eventual entry into force of the IMO Ballast Water Management (BWM) convention.

ICS underlines the shipping industry's commitment to full compliance with the IMO sulphur ECA requirements from January 2015 through the use of low sulphur distillate fuel or alternative compliance mechanisms such as exhaust gas cleaning Systems (scrubbers).  However, information collected by ICS members suggests that many governments are not ready to implement the requirements in a uniform manner, in order to ensure the prevention of market distortion.

ICS members identified an urgent need for the Paris MOU on Port State Control - in cooperation with the European Commission and the United States - to finalise harmonised procedures before implementation begins. 

"The shipping industry is investing billions of dollars in order to ensure compliance.  The huge costs involved could have a profound impact on the future structure of the entire shipping industry and the movement of international trade," said ICS chairman Masamichi Morooka. 

"It is therefore incumbent on governments to get the details of implementation right as we enter this brave new world in which fuel costs for many ships will increase overnight by 50 percent or more.  We only have six months to go and we think it vital that governments clarify all of the details of ECA implementation as soon as possible," he added.    

ICS member also stressed that time is running out to make new BWM regulations fit for purpose, and that deep flaws still exist in the convention. Obstacles that are hindering it's the BMW convention's ratification include: the lack of robustness of the current type-approval process for the expensive new treatment systems; doubts about the procedures to be followed during Port State Control; and the need to provide confidence to shipowners that have already installed the new equipment so that they will be regarded by the authorities as compliant, said ICS. "Unless these problems are resolved immediately at IMO there is a considerable risk that the regime will not be fit for purpose," Morooka pointed out.

Furthermore, ICS is particularly concerned that port state sanctions could impact unfairly on shipowners who, in good faith, have fitted type-approved equipment, only to be told subsequently that it falls short of the required standard.

At the next meeting of the IMO Marine Environment Protection Committee (MEPC 67) in October 2014, governments need to take what may be the final opportunity to act by agreeing some relatively simple changes to how the Convention will be implemented, explained ICS. 

The ICS AGM agreed in principle to the text of a detailed industry submission that will be made to MEPC 67, which will suggest solutions to these complex problems in the form of a draft MEPC Resolution that could be adopted by IMO Member States before the Convention enters into force. 

Looking ahead, the ICS AGM considered the lessons to be learned with respect to the development of maritime regulation, and expressed concerns about the quality and quantity of recent regulatory changes. ICS stated that it sees regulatory proposals by governments being taken forward without any supporting evidence of compelling need.

Morooka explained: "Environmental protection is of the utmost importance, and ICS does not question the objectives or good intentions that are usually behind most government proposals.  But in the future we believe there needs to be far more emphasis on proper regulatory impact assessments which also take full account of the economic sustainability of shipping. 

"More attention also needs to be given by IMO Member States to the practicality and timescale allowed for implementation of new regulations.  This should happen before the rules are adopted, not several years later when it may be too late."                          

The ICS AGM was hosted by the Cyprus Shipping Chamber in its 25^th anniversary year, and commenced with a gala dinner hosted by the President of the Republic of Cyprus, His Excellency Nicos Anastasiades, at the Presidential Palace in Nicosia.        

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