International Chamber of Shipping Conference

Mr. Chairman, ladies and gentlemen,

 

It is a great pleasure for me to be with you today and to have the opportunity to address this conference.  ICS is one of several non-governmental organizations that represent the shipping industry at IMO and has one of the longest pedigrees.  ICS is composed of national shipowners’ associations and, therefore, represents the views of the shipping industry and I very much appreciate the cooperation and support of ICS to the work of IMO.

 

You do not need me to tell you that this conference comes at a time when the shipping industry is facing stern challenges on many fronts.

 

In addressing these challenges, shipping can find common cause with IMO. For, although IMO is the industry’s regulator, nevertheless there is a clear mutual interest in the industry being healthy and vibrant. In many ways, your challenges are our challenges, and we face them better when we face them together.

 

This year, 2012, has been remarkable for the way that the role of the oceans in meeting the sustainable economic, environmental and social goals of the global community has at last begun to be widely recognized and understood. Our seas and oceans support our society in so many different ways. They provide raw materials, energy, food, employment, a place to live, a place to relax and, not least, the means to transport about 90 per cent of global trade.

 

The maritime industries represent a very sizeable industrial sector. But the success and growth of these industries should not be achieved by threatening the very element that sustains them, supports them and gives them life – the sea. It has been widely documented that the global marine environment and its resources have been degraded and over-exploited at an ever increasing rate and scale. But I am not saying that this is due to increased volume of shipping. On the contrary, I am a strong believer and advocate that shipping has a track record of marine environment protection and is steadily improving its performance in pollution prevention and protection of marine environment.

 

The search for growth in the maritime industry is a balancing act. Achieving this balance will depend on achieving what has become known as sustainable maritime development.

 

In June, I attended the United Nations Conference on Sustainable Development – Rio+20, to re-affirm IMO’s commitment to sustainable maritime development. I am delighted that the shipping industry, through ICS, was there to join with me in using the event as a platform to draw attention to how shipping contributes significantly to the three pillars of such development – social, environmental and economic.

 

The IMO Council has adopted “Sustainable Development: IMO’s contribution beyond Rio+20” as the theme of World Maritime Day for next year, 2013. And, since the United Nations is preparing a set of sustainable development goals as an outcome of the Rio+20 Conference, I believe IMO should prepare its own goals for the maritime industries, as our contribution to the effort of the United Nations. I have, therefore, established an in-house mechanism within the IMO Secretariat to make progress in this initiative. As the work progresses, the industry, including ICS, will be consulted.

 

My vision is that sustainable maritime development goals should encompass:

 

• safety culture and environmental stewardship;
• energy efficiency;
• new technology and innovation;
• maritime education and training;
• maritime security and anti-piracy actions;
• maritime traffic management;
• maritime infrastructure development; and
• global standards to be developed and maintained by IMO.

 

These are, I believe, the primary pillars of a sustainable future for the maritime transport sector, and I am confident that, with the support of ICS and others, we can devise meaningful objectives for each of them.

 

Shipping has shown on many occasions that it does not always need a regulatory imperative to move forward.  Political and other considerations or procedures in legal instruments may sometimes make certain measures difficult to introduce speedily. But this should not prevent the industry from understanding their benefits and ensuring that these benefits are realized sooner rather than later.

 

I am thinking here, in particular, of measures to improve the energy efficiency of international shipping, and of the Ballast Water Convention, both of which the industry can implement now, and from which everyone can benefit.

 

The Regulations for energy efficiency of ships were adopted by Parties to Annex VI of MARPOL at MEPC 62 in July 2011 and apply to ships of 400 gross tonnage and above, trading internationally. They make mandatory the Energy Efficiency Design Index, or EEDI, for new ships, and the Ship Energy Efficiency Management Plan, or SEEMP for all ships, as of 1 January 2013.

 

The EEDI is a non-prescriptive, performance-based mechanism that leaves ship designers and builders free to use the most cost-efficient solutions for the ship to comply with the regulations, both now and as the requirements are tightened, up to the year 2025.

 

All ships of 400 gross tonnage and above engaged in international trade will be required to implement and maintain a SEEMP, which establishes a mechanism for operators to improve the energy efficiency of ships.

IMO’s measures to reduce GHG emissions from shipping, to my mind, are clear proof of how effectively, and quickly – yes quickly – IMO can work.

 

They are good measures - good for the environment, good for mankind, and good for shipping. And that is why I believe you should not wait to implement them. By using EEDI and SEEMP now, as benchmarks for improving energy efficiency and reducing both fuel consumption and harmful emissions from ships, the industry can take advantage of a great opportunity to move forward, in the context of Sustainable Maritime Development.

 

I am sure that you know my position on market based measures.  MBM must be debated at IMO and IMO should develop them.

 

You know that the MEPC in October will put further effort into adopting an MEPC resolution on technology transfer for the implementation of EEDI.  The principle of CBDR, the Technology Transfer Trust Fund, the Ad hoc working group on technology transfer, IMO’s Integrated Technical Co-operation Programme and the issue of intellectual property:  they are all issues to be discussed but all the building blocks are now set out for discussion and I am hopeful that the MEPC could resolve this issue at its next session.

 

In the meantime, the shipping industry should show its leadership towards implementation of EEDI and SEEMP.

 

While I am encouraging you to move towards implementation of EEDI, the same can be said of the Ballast Water Convention. This has now been ratified by 36 States, exceeding the entry-into-force criterion of 30 States. However, around six per cent of the world's merchant shipping tonnage is still needed to fulfil the other entry-into-force criterion, of 35 per cent tonnage representation.

 

The Convention was adopted unanimously in 2004 and, since then, all the fourteen sets of required guidelines for its implementation have been adopted. To date, 28 ballast water management systems have been granted Type Approval by their respective Administrations, and dozens of other systems are in various stages of development. The tools for effective implementation of the BWM Convention are, therefore, in place.

 

If you have ships that fall under the provisions of the Convention, you need to install ballast water management systems in accordance with the timeline stipulated in the Convention. And, today, there is ample choice of systems and the implementation dates of the D-2 standard are known.

 

This is particularly true for newbuilds. They will need a ballast water treatment system, sooner or later. It is surely better to start now, as retrofitting will be more expensive.

 

Concerns have been raised about whether there is sufficient shipyard capacity for installing systems on thousands of ships. Timely action from you, the shipowners, will alleviate this concern; postponing action will simply increase it.

The possibility of unilateral action from certain countries is also emerging as a source of concern for many. Entry into force of the BWM Convention would, to a large extent, reduce this concern, as there would be one set of international regulations in place, i.e. those of the Convention.

 

It must be recognized that the BWM Convention was adopted before we had sufficient practical experience of managing ballast water aboard ships, in particular in terms of using treatment systems. Entry into force of the Convention would provide the chance to improve it, by amending it as may be necessary.

 

Shipowners can take leadership in this important issue by encouraging flag Administrations to ratify the Convention, which will remove many of the associated uncertainties.

 

By doing so, you will also take an important step towards reducing, and ultimately eliminating the risks to the environment, human health, property and resources arising from the transfer of harmful aquatic organisms and pathogens through ships' ballast water and sediments and provide a firm expression of responsible stewardship towards protecting the marine environment.

 

The problems associated with ballast water are inherently connected to the expansion of the world trade. This is an issue from which the shipping industry cannot escape.

 

The Convention has been established and dates for the application of treatment systems are firmly set.

 

Although a good number of technologies are now approved and available, it is true that the pace of development was not quick enough until very recently. As a result, some shipowners lacked the confidence to install the required systems aboard recently constructed newbuilds.

 

A number of Governments have indicated their desire to implement national rules. This is creating concern and uncertainty around the application of Ballast Water Management requirements.

 

My solution would be to bring the Ballast Water Convention into force as soon as possible and deal with all the teething problems formally, under the framework of an active Convention.

 

This, in my view, would be far better than the alternatives, namely:

 

• delaying the entry into force of the Convention;
• prolonging uncertainty over the requirement of retro-fitting of treatment systems;
• shortening the time between entry into force and the target dates for retro-fitting;
• continuing concern about unilateral regulations; and
• discouraging new entrants to enter into the market for ballast water technology research and development,

all of which would just create chaos.

 

Yesterday, I was delighted to receive an instrument of accession to the BWM Convention from the Ambassador of Denmark.  I am now taking action to encourage Member Governments to ratify the Convention as soon as possible.  I have been taking every opportunity when meeting Ministers to ask them to accept the Convention.  I am urging IMO Member Governments to take action, not later.

 

While I am urging Member Governments, shipowners, I know you have the power to encourage your flag State administrations to ratify the Ballast Water Convention as soon as possible. So I also urge you, take decisive action now, collectively, to ensure entry into force of the Ballast Water Convention without losing any more time.

 

Ladies and gentlemen, before I conclude I should just like to mention two other topics that I know are of great concern to you.

 

In 2012, the 100th year since the sinking of the Titanic, safety at sea was always going to be in sharp focus for shipping.

 

But now, in the wake of the Costa Concordia incident that made headlines all around the world, safety is even more prominent.

 

Three days after the Costa Concordia accident, on 16 January this year, I stated in my opening remarks to the Sub-Committee on Stability and Load Lines and on Fishing Vessels' Safety, that we should not speculate on the cause of the accident, and that the casualty investigation should be carried out as soon as possible and any findings should be sent to IMO for action to establish any measures that might be required to avoid recurrence of similar accidents.

 

In its spring session this year, the Maritime Safety Committee debated passenger ship safety under an agenda item that I established. The Committee set out an action programme to deal with the accident. Any further actions would, of course, largely depend on the availability of the casualty investigation report, which is still awaited from the Italian authority. I cannot overstress how important it is that we do receive the findings from the investigation, as soon as possible, so that IMO can learn the lessons and take decisive actions and definite steps to implement any necessary measures to improve the safety of large cruise ships. I am sure that the Italian authority is putting every effort to ensure that the report will be presented to MSC in November.

 

I have said it is important not to speculate but one thing nobody can deny is the fact that Costa Concordia grounded on a well-charted rock. As a result, a large amount of water rushed into the ship, causing severe listing and the final grounding which resulted in the loss of 32 victims and the difficult evacuation of more than 4,000 passengers and crew. If she had not hit the rock, this tragic event would not have happened. It follows, therefore, that the most legitimate action IMO can take now is to consider effective measures to reduce the risk of groundings and to ensure the effective implementation of such measures, to avoid any similar recurrence in the future.

 

Obviously, the nature of such measures would be operational and could be implemented swiftly, throughout, the cruise industry.

 

I know that the cruise industry is taking serious action to improve operational safety and implement a safety culture but our regulatory system should also be strengthened to formalise the actions it takes and support its efforts.

 

In 1912, the Titanic hit an iceberg and sank, with the loss of more than 1500 people. One hundred years later, Costa Concordia hit rocks and grounded on the coast. Since Titanic, we have introduced a great many safety measures and improved the safety record of shipping significantly, but nevertheless, an accident which resulted in total evacuation of more than four thousand people still occurred.

 

Regardless of operational measures that may be needed to avoid recurrence, in the future, of the type of grounding we saw with the Costa Concordia, ships need to leave ports, to call at ports and to navigate through shallow waters, close to land. Therefore, other legitimate questions the Costa Concordia casualty raises are whether the current stability and survivability requirements, including requirements for evacuation systems and procedures for large cruise ships, are adequate; and whether any improvement could be made with currently available technology.

 

Secretary General O’Neil took an initiative to review safety of large passenger ships more than one decade ago. Yes, SOLAS has been amended to increase safety levels significantly over the last decade and, now, the principle of “safe return to port” is reflected in SOLAS.  And I know that the recently launched super large cruise ships are designed and constructed to a large extent applying the principle of “safe return to port”.

 

But, the Costa Concordia accident focused the attention of the general public on the issue of the safety of large cruise ships which accommodate thousands and thousands of passengers and crew. The safety of large cruise ships must be debated by the Maritime Safety Committee and any serious discussion must be based on the findings and recommendations of the casualty investigation.

 

I must say that the stakes are high for the impending discussion at the November session of the MSC on the expected report of the casualty investigation into the Costa Concordia accident.

 

Finally, let me turn to the matter of piracy, which still plagues the industry despite huge efforts towards countering it. IMO is now working hard, with others, to deliver viable solutions in a number of initiatives, such as the building of effective counter-piracy capacity and infrastructure; the development of proper legal and criminal infrastructures; undermining the pirate economy and its associated financial model and helping to develop viable, alternative sources of income for those who have been, or may be, tempted to turn to crime.  I have also organized a High-level Segment of the Maritime Safety Committee, which debated the need for an international approach to the issue of arms on board ships.  These are some of the areas on which the international community must concentrate if piracy is to be brought to an end.

 

IMO is working actively with a number of other agencies on related initiatives, and recently concluded five strategic partnerships with a number of UN agencies and the EU. A wide range of activities are envisaged as a result of these partnerships.

 

IMO has a long history of addressing piracy, on several fronts, and we can point to many examples where success has been achieved. In this context, I should mention that we are concerned about the worsening situation in the Gulf of Guinea area, a very different problem from the piracy off the coast of Somalia, and, with others, we are taking steps to address this situation too. You have my assurance that we will continue – and strengthen – these efforts until a satisfactory resolution has been reached. 

 

Ladies and gentlemen, I see that you have a very full programme ahead of you for the next two days, and that many of the issues you will be debating and discussing have a direct link to the issues that currently occupy the Committees and sub-committees of IMO. Indeed, I have no doubt that the outcomes of this conference will find their way back to IMO, through the submissions and interventions of ICS.

 

Mr. Chairman, ladies and gentlemen, thank you. I wish you an interesting and highly successful conference.

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