IMO governance under attack – but who is pushing the buttons?

Malcolm Latarche
Malcolm Latarche

05 April 2018

Earlier this week, Transparency International (TI) – a NGO headquartered in Germany – issued a statement about its impending report on governance at the IMO and criticising shipping’s global regulating authority for potential unresolved conflicts of interest.

It should come as no surprise that the release of the preliminary report – the actual report is apparently due for publication next month – should come in the build-up to next week’s MEPC 72 and in fact the announcement of the study states that; ‘Private shipping-industry concerns could have undue influence over the policymaking process at the IMO. This could undermine the UN agency’s ability to effectively regulate greenhouse gas (GHG) emissions from maritime trade. According to a report by the European Parliament, the shipping industry could contribute up to 17% of global CO2 emissions by 2050 if left unregulated.

The report appears to be a continuation of the campaign that began last October when UK-based NGO InfluenceMap claimed the IMO’s intersessional working group on greenhouse gas emissions was unduly influenced by shipping industry bodies controlled by shipowners’ organisation. At the time the IMO did defend itself pointing out that decisions are made by government delegates and not by observer bodies of which there are many on all sides of the debates that take place at IMO meetings.

Among the criticisms in the new TI report are claims that;

Journalists indicate that they are unable to report freely on IMO meetings. Non-profit organisations with consultative membership of the IMO can face expulsion if they criticise the agency or report on country views, for example.

The majority of the world’s commercial fleet (52 per cent) is registered in only five states - Panama, Liberia, the Marshall Islands, Malta and the Bahamas – many of which are known as tax havens for ships. Together, these five states contribute 43.5 per cent of the total funding from the IMO’s 170 member states. These countries potentially have exaggerated weight in the IMO policymaking processes, particularly when no mechanism exists to protect against undue influence.

Governments are able to appoint employees of corporations, including shipping companies, to their delegations, and they have dominated some delegations. These private-sector delegates can determine their government’s position on IMO policy and are not subject to conflict of interest rules nor to a code of conduct.

The report however notes that even in the absence of a comprehensive access to information policy, transparency about the IMO’s administration is high, and that information about the remit, powers and rules of procedure of its assembly, council and committees is easily accessible. The IMO itself is not responsible for who member states appoint to their delegations.

TI goes on to urge the IMO to establish a stronger governance framework. Saying it should engage in a transparent process of open dialogue with its external stakeholders (including civil society and industry), to improve transparency, ensure decision-making processes reflect the public interest, and apply robust integrity rules and measures. More specifically it says that ‘There should be no delay on action to combat climate change. The Intersessional Working Group on GHG Emissions from Ships meeting in London today should set ambitious targets for reducing emissions in line with the Paris Agreement, and begin taking measurable action now.’

There are many organisations and individuals within the shipping industry itself who are also prepared to criticise the IMO’s processes and decisions but in the main their objections come down to the premature imposition of regulation before the technology needed for compliance has evolved into robust commercial products.

TI’s argument that some states have undue influence because of the size of their fleets is true only up to a point. Both Liberia and the Marshall Islands were early signatories to the ballast water convention and Panama’s signature was not even required to bring it into force. On other matters, the size of any fleet is immaterial as witnessed by the establishment of ECAs where it is the will of local governments that drive the establishment.

Opposition to some of the measures demanded by NGO’s does not always come from the five flag states named but from other nations that are not necessarily large in maritime matters but who see that demands for ever greater fuel economy by ships is likely to have a negative impact on their trading prospects and on the living standards of populations.

There is also another aspect to the numerous denigration of the IMO and the way it works that should concern the shipping industry and many of the countries that are member states of the IMO. Almost all of the NGOs that regularly criticise the IMO and its workings are funded to a greater or lesser degree by the EU in one form or another.

The NGO Shipbreaking Platform which argues against the recycling of ships in Asia despite some of the breaking yards having been certified under the Hong Kong Convention is almost entirely dependant upon the EU for funding. TI also receives very large sums from various branches of the EU and from governments that are member states of the EU. In fact in 2016, according to TI’s own financial report, the NGO had a total income of almost €24m of which around €17m came from European government agencies and the EU.

Admittedly, TI has much more involvement in matters not related to shipping than it does with criticising the IMO. But while TI is quite transparent as to where its income comes from, it certainly appears to be promoting the interests of the EU when attacking the IMO. Nobody connected with the shipping industry in any way can have missed the fact that for many years the EU has been relentless in pursuing its own policies – often against the wishes of its own member states.

Examples of this include imposing restrictions on fuel types in advance of the establishment of the two European SECAs, implementing a MRV regime and the matter of ship recycling drawing up a white list of yards that mostly ignores in Asia approved as meeting Hong Kong Convention standards. Willingly or not it would appear that TI has become just the latest weapon for the EU in dictating the international agenda.

It may well be that the EU’s position will prevail at the IMO – some would say that it certainly has had the upper hand for a good many years now. But at the IMO, other nations also have their own agendas to pursue and it may be that support for backing EU favoured measures is on the wane. Furthermore, on a wider scale support for the EU and its extra-governmental activities is losing support from its own member governments.

Brexit and recent election results in Germany, Austria and Italy and to a lesser extent in France and the Netherlands shows the popularity of the EU is fading fast. One wonders what the future of some of the NGOs will be if the EU’s ambitions are brought firmly back into line of its member states governments and populations and funding for activities beyond their desires are curtailed.

The TI summary report is available here.