Better Regulation

The IMO World Maritime Day theme for 2016 was ‘Shipping: indispensable to the world’. Maintenance of the shipping industry’s economic sustainability is very important given its vital role in transporting about 90% of world trade, upon which the functioning of the world economy and its further development depends. It is crucial that the regulatory process at IMO reflects this.

At the meeting of the IMO Council in November 2015, in co-operation with the International Association of Classification Societies (IACS), other shipowner associations and a number of governments, ICS made an important submission suggesting a new approach towards the development of future IMO regulations. The paper was well received and taken forward as part of the IMO Council’s agenda in 2016.

For over 50 years, IMO has contributed greatly to improving the shipping industry’s safety record and its environmental performance. IMO’s process of regulatory development has served the industry and society very well, providing a comprehensive regulatory framework that can be implemented and enforced worldwide. However, there is growing concern throughout the shipping industry that something might be wrong with the quality and quantity of some recent regulatory changes. All too often the industry has seen proposals by governments being taken forward without any real evidence of a compelling need when assessed against the economic impacts and the actual benefits delivered.

For several years, ICS has argued that far more emphasis should be given, when rule changes are proposed, to full and proper regulatory impact assessments that take greater account of the economic sustainability of maritime transport. More attention could also be given by IMO Member States to the practicality and timescale allowed for the implementation of new regulations. It is far better for this to happen before new rules are adopted, not several years after adoption when it is far too late.

A case in point was the debate which led to the adoption twelve years ago of the Ballast Water Management Convention, and the subsequent implementation problems that have seriously hampered its entry into force.

The Ballast Water Convention is an example of a major regulatory change that will have a profound economic impact on the structure of the global shipping industry due to the huge capital costs involved. Whilst the nature of some of these impacts was foreseen at the time of the Convention’s adoption, it is fair to say that the economic magnitude was probably not, and it is becoming increasingly clear that there will be unintended consequences.

ICS does not question the good intentions behind proposals that are made by IMO Member States. But in the future ICS believes that consideration of a new approach to regulation should be fully consistent with the United Nations Sustainable Development Goals, which acknowledge that the environmental, social and economic pillars of development are all inextricably linked. 

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