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Shipping stuck in a regulatory eternal triangle

Shipping stuck in a regulatory eternal triangle
It is tough being green, because you get precious little thanks for your effort and endless demands to be even greener, from all the self-serving environmental groups that snipe from the sidelines.

It is also difficult to be enthusiastic about being ever-more sustainable in your operations, when just about everything the regulators prescribe comes off your bottom line, at a time when in some shipping sectors, the charter rate is not even paying the crew wages.

You might point with some satisfaction at the results shown in the 3rd IMO greenhouse gas study 2014, which demonstrated that the shipping industry was showing “steady and ongoing improvements” in the amount of the dreaded carbon exhausted by its vessels, attributed both to efficiency improvements and slow steaming. Maybe, you might have thought, the greens might get off everyone’s back for a while. But there is not much chance of that.

Because there is a sort of regulatory “eternal triangle” at work here, that seems to make it very difficult for the shipping industry to have any certainty about what environmental investments and practices might be demanded of it in the future. One side of this triangle has emerged because of the regional challenge of the European Union, which seems to feel honour bound to inject its pre-determined views into every issue being considered at the IMO.

Brussels, where the greens exert disproportionate power, starts off with the premise that IMO is slow and inefficient, clinging to the status quo and excessively influenced by the shipping industry. Similarly, the unilateralist stance constantly taken by the United States, either through design, or its own internal political systems, constitutes the third side of the triangle, which makes life increasingly difficult for a global industry, which desperately needs the certainty of an international regulatory regime.

Take the problem of ballast water as a perfect example of this difficulty. The industry knows it has the ballast water convention hanging over it like a harbinger of doom, with bills ranging from $1m to $5m to outfit a typical deepsea vessel. But if the money is spent, it could be cash down the drain, if the equipment chosen fails to meet the approval process prescribed by the United States, which is at odds with that agreed by the IMO.

And with the problem of atmospheric emissions, there are US states already enthusiastically fining shipping companies for failing to meet their environmental criteria, while Brussels is already pushing ahead with its own requirements, which will be imposed regionally and in advance of anything that might be agreed in Brussels. And we are still arguing about whether ships should have sufficient reserve power to keep them off a lee shore, with the “brownie points” awarded by the greens to the lowest powered ships, and the views of shipmasters, who have to handle these babies, regarded as secondary, if not irrelevant.

The situation was described some time ago, by the Bimco president John Denholm as the “perfect storm” of environmental regulations which was engulfing the shipping industry and an industry, moreover, that was in recovery mode. The industry itself, as is made clear by its representative bodies, is more than willing to take on its environmental improvement burdens, but needs a degree of regulatory certainty and a global perspective that is sadly diminishing as the bickering of the participants in the triangle continue.

None of this is making life easier for the IMO, which has to operate with the support of all its member states and not be dominated by powerful unilateralists such as the US and impatient blocs like that driven by Brussels, diminishing the sensible consensus and argument that was once ever-present in a UN agency proud of its technical expertise and an ability to deliver the goods, even if they took a bit of time to arrive!