ICS International Shipping Conference

Mr. Chairman, fellow speakers, ladies and gentlemen,

 

It is a great pleasure to be here and I am grateful for the opportunity to address such a worthy and important gathering.

 

Our hosts, the International Chamber of Shipping, must be commended, not only for assembling a very distinguished panel of speakers, but also for arranging such a diverse yet connected menu of topics to be covered.

 

The themes you will be discussing during the course of today will come as no surprise to anyone involved in shipping.

 

The financial outlook for the industry has been strained for some considerable time now, with the global crash of 2008 being followed almost immediately by the European debt crisis and throwing the financial foundations of global society into turmoil. 

 

What makes things worse, as far as shipping is concerned, is that the period immediately before the financial crisis of 2008 was one of great expansion. The huge investment in new ships during that time is now coming back to haunt the industry as over-capacity drives down freight rates and makes cost increases even harder to bear.

 

Not surprisingly, the first part of this morning will be devoted to examining the impact on shipping of the global financial crisis and looking at how economic sustainability can be achieved in these difficult times.

 

As the day progresses, environmental issues, the human element, safety and shipping’s public image will all come under the spotlight in what promises to be a fascinating day’s discussion.

 

The fortunes of shipping are directly related to the strength of global trade; and, despite the current global economic problems, growth in the longer term seems inevitable. A global population that has passed 7 billion people and is still rising should ensure that is the case.

 

So, in the longer term, shipping has great cause for optimism, with a strong future ahead of it. But, to reach that future, changes must be made and some important decisions must be taken.

 

At IMO, we are keen to play our part. We are taking pro-active measures in a number of areas to encourage review and reform, both internally and within the wider shipping community.

 

Recently, for example, we held the first ever IMO symposium on the future of ship safety at IMO headquarters. We wanted to provide this as an opportunity to explore new partnerships and bring new voices into the debate at IMO.

 

The symposium was attended by hundreds of technical experts and influential figures in the maritime community.

 

Representatives from the shipping industry, shipbuilders, classification societies, academia, governments and IMO took the opportunity to reinforce or build new relationships, while contemplating future regimes for ship safety.

 

We heard views from the cruise industry, container ship operators, the tanker industry, engine manufacturers and ship builders. We heard some of the lessons learnt from the Fukushima nuclear incident. We also listened to the views of the younger generation in the shipping industry. We heard experiences from within the industry in facing the challenges involved in meeting new regulations that were encouraging.

 

My strong message to the symposium was that safety should remain firmly at the centre of IMO’s activities and that the maritime community should start considering a new regime for the future. I welcomed the positive contributions made by the industry and classification societies to support these concepts.

 

The 1974 SOLAS Convention is a good framework and we can update it as necessary, as we have done over the last four decades. But, it is largely a prescriptive instrument. The regulations tell you what to do. If you tick all the boxes, you have achieved compliance. In the years to come, however, my aspiration is to encourage the maritime community to use more safety-assessment and risk-assessment techniques in framing goal-based regulations. This process is already underway and I think it is in this approach that the future lies.

 

We need to start, as soon as possible, a holistic review of the current regime. We should not rush, but we should start working now, with all stakeholders. Emerging technologies and innovation offer huge potential to take safety into a new era – but they need to be properly and cautiously embraced, in a systematic way, making sure that all relevant players are involved in the process.

 

For a future safety regime, with the emphasis on risk-based and goal-based approaches rather than prescriptive regulations, the availability of essential data is a key factor. It will be essential to establish a new system to collect and analyse casualty and safety data. Shipping companies, classification societies, flag States, port States and casualty investigation institutions will all need to be involved. This will take time to develop; and even more time will be required to realize the benefits from such a system after its implementation. But, we should start preparing such a system now.

 

2014 is the 100th anniversary of SOLAS, and 2024 will be the 50th anniversary of the 1974 SOLAS Convention. I think the regulatory regime of tomorrow may well require a full and complete review of the SOLAS Convention.

 

My vision is to introduce a system change before we celebrate that 50th anniversary, in 2024.

 

As we are all aware, despite the huge advances that have been made in recent years, each new generation of vessels brings fresh challenges and accidents still occur, even today. This reinforces the need for continual improvement. Our efforts to promote maritime safety can never end.
 
But it is my belief that we stand on the brink of a new and positive era for ship safety, with techniques such as formal safety assessment, probabilistic risk assessment, and measures such as goal-based construction standards pointing the way towards more robust and safer ship designs.

 

And what is more, the ships of the future must provide a continuous response to the needs of society, industry and global trade and must be operated within a framework that encourages a safety culture beyond mere compliance with statutory requirements.

 

***

 

Ladies and gentlemen, much has been said during the past year about sustainability. Last year’s UN conference, Rio+20, gave a strong impetus to global concerns about sustainable development and you will be aware, I am sure, that IMO chose to focus on its contribution to sustainability beyond Rio+20 as the theme for this year’s World Maritime Day.

One of the main outcomes of the Rio+20 Conference was the agreement by States to launch a process to develop Sustainable Development Goals. At the global level, Governments through the United Nations are working to translate this important concept into something truly tangible.

 

My colleagues in the IMO Secretariat and I are working, with industry partners and others, on the concept of a sustainable maritime transportation system. On World Maritime Day later this month, 26 September, I will invite interested Member States and organizations to discuss the concept of sustainability at a symposium.

 

I see considerable benefit in placing our discussion on the sustainability of shipping firmly in the context of the follow-up to Rio+20. At Rio+20 it was clearly recognized and accepted that sustainable development has three elements: environment, society and economy. Each of these is equally important and none should be allowed to take precedence over the others. Social and economic sustainability must be taken into account as much as environmental sustainability.

 

A balanced approach is the only solution, and this principle should be applied in any discussion on shipping at IMO.

Shipping cannot be expected to make a disproportionate contribution to global sustainability. The cost of safeguarding and preserving the environment should be borne by society as a whole – always bearing in mind, of course, the concept that the “polluter pays”.

 

In the case of emission control, shipping is responding to a demand by global society for less harmful emissions. It seems reasonable that the cost of achieving this, whether that means investment in new fuel supply infrastructure or in exhaust gas cleaning systems or supply of low sulphur fuel, should be shared by society too.

 

Yesterday, I shared a platform with Stephen Hammond, the Shipping Minister of the United Kingdom, as he announced the United Kingdom’s intention to accelerate the study into the availability of low-sulphur fuel to meet the emission standard set by IMO to 2020.

 

I stated that, IMO is the goal-setter and therefore should avoid changing the goal posts easily. Therefore, this study must be carried out as soon as possible so that we can get a clear picture of the availability of low-sulphur fuel, in order to take appropriate actions in time to meet the standard.

 

Then, based on the results of the study, we need to take proper action. This may mean action for the oil refinery industry to make necessary investment to provide low-sulphur fuel at a reasonable cost to shipping; or it may mean some other kind of action, including to install onboard scrubbers or even to change fuel to other clean energy such as LNG. But this must be debated by the community as a whole, because not only is the concept of sustainability beneficial for all parties involved but also all parties must be involved in the debate on who should share the burden to ensure sustainability.

 

As the world’s only really reliable, global, cost-effective and energy-efficient mass transportation method for energy, materials, foods and industrial products, maritime transport is central to sustainable development. So we have to ensure that the development of the global maritime transportation system itself is also sustainable.

 

Because the maritime transportation system is so essential to the continued development and future growth of the world economy, IMO will continue to take the lead in supporting it with the appropriate global standards and by helping to promote, through technical co-operation, the necessary national maritime transportation policies and meet the expectation of society to act as the institutional framework for a sustainable maritime transportation system.

 

Thank you.
___________