LISW puts port regulation on the agenda

Paul Gunton

13 September 2019

Regular ShipInsight readers will know that I believe the world needs a global body to regulate port states and their ports in the same way that the IMO regulates flag states and their ships. I wrote about this in January and this week I had an opportunity to test my theory during London International Shipping Week (LISW).

I attended an event on Monday (9 September) with the title ‘Do ports need international regulation?’ I could have predicted the panel’s prevailing view from their affiliations: apart from its chairman and a lawyer, the remaining five speakers were split four-to-one in favour of the ports sector. But then, it was jointly sponsored by Hutchison Ports.

Patrick Verhoeven, MD, IAPH

Nonetheless, there was a nod in the direction of my viewpoint from IMO secretary-general Kitack Lim, who had once been president of Busan Port Authority in South Korea. He gave some opening remarks and said that his experience had shown him “at first hand that ship, port and related infrastructure have to be considered as integral parts of a single entity, which is the global supply chain.”

He went on: “Why shouldn’t the positive benefit of IMO’s work be felt … throughout the supply chain?” I inferred from his remarks that he thinks this is not currently the case and that it should be. I agree.

There are certainly many IMO and other conventions that are relevant to ports, such as those related to security and reception facilities, and there are efforts being made to increase dialogue and cooperation between ports and other stakeholders.

In particular, I welcome IMO’s resolution MEPC.323(74) that was adopted by MEPC 74 in May this year to encourage cooperation between ports, IMO member states and the shipping industry in implementing IMO’s GHG strategy. It was developed from an idea presented to MEPC 73 by the International Association of Ports & Harbors (IAPH) that was subsequently backed by Canada and, by the time a draft resolution was prepared for MEPC 74, by seven IMO member states and seven industry organisations.

“In the end, it’s about competition,” says Patrick Verhoeven, managing director of IAPH.

I spoke to IAPH managing director Patrick Verhoeven about the resolution and he confided that its “words have been chosen carefully because ports are on the verge of the IMO.” Perhaps because of that, its ambition seems modest, covering four specific areas of cooperation. But, being an IMO resolution, its text puts the onus on IMO member states, inviting them “to promote the consideration and adoption [of the four measures] by ports within their jurisdiction.”

Nonetheless, it does go on to also invite ‘international organisations’ to support the measures in various ways. For a broader understanding of what lay behind the resolution, follow the link above and read all the introductory remarks.

IAPH is one such international organisation and, while Mr Verhoeven and his members undoubtedly support the IMO resolution’s aims, IMO has no authority over them. Nonetheless, “symbolically, it’s quite important,” he said, telling me that, since its adoption, a growing number of ports around the globe are saying “let’s work together” on addressing the challenges of IMO’s GHG strategy “because on our own we can’t do that.”

So far, so fine. But then he added: “In the end, it’s about competition. There’s no point if [one port] says ‘we’re going to provide this incentive’ or [supplies] LNG if the neighbour doesn’t do it.”

In other words, for ports, this is a regional matter based on local competition, not an international one based on common standards. I asked him whether he would like to see a global body setting standards for on how ports are operated, designed and managed in the same way that IMO conventions set global standards on how ships are operated, designed and managed. “No … A lot of them compete with neighbours, not with someone in another part of the world.”

At the Hutchison/IMO event one speaker, Sakura Kuma, executive director of marketing and sales at Yokohama and Kawasaki International Port (YKIP), suggested that port operating standards were being improved and spread through best-practice and by finding “common ground” that can be shared with other ports. “Maybe later on, regulation [could be] put in place but ‘regulation’ is a word we need to be very careful [about],” she said.

Diana Whitney, general counsel at Hutchison Ports at LISW 2019

Diana Whitney, general counsel at Hutchison Ports, was also cautious. She mentioned the EU Port Services Regulation which “doesn’t really work” because of the variety of port ownership models. “You can’t regulate for efficient ports,” she said.

During the Q&A session I put my view to the panel, immediately after an ITF delegate had referred to differences in safety standards between ports in different regions, even between ports that are members of the same international group. I felt his remarks underlined the need for common standards – a SOLAS for ports, if you like.

“You can’t regulate for efficient ports,” says Diana Whitney, general counsel at Hutchison Ports

Lamia Kerdjoudj-Belkaid, secretary general of the Federation of European Port Companies and Terminals (FEPORT) accepted the point I was making but said that it was important to be pragmatic. The EU regulation, for example, “took 20 years to make the member states agree on a number of provisions that were workable and acceptable for each and every member state.”

Two decades, just to get an EU regulation agreed! What hope is there for a global deal?

“We are not opposed per se to regulation,” she said but “we cannot compel everybody to take one single model.” Instead, a gap analysis should be carried out to assess the differences and the relative strengths of ports operations in various regions and then “see what the needs are of port users in safety and port-reception facilities.”

The one shipowner representative on the panel was Guy Platten, secretary general of the International Chamber of Shipping, who said there were “lots of issues around ship-shore interfaces and compliance with maritime regulations.” For example, port staff “do not always take into account the requirements that the ship needs to follow in terms of international conventions.” He also listed other concerns: bribery and corruption; regulation of bunker suppliers; information exchange between ship and shore, and the need for “a better understanding on both sides” of safety matters. In all, he identified five areas “where we believe better regulation for ports could help.”

He is right, and these are not regional concerns. I believe that any ship arriving in any port should know that the facilities comply with established standards. Port state control inspectors check compliance on ships; no-one checks that ports meet their obligations.

My question is this: who should set and check port standards? Should it be left to regional authorities, market forces and large multi-national port groups, as the panellists seemed to suggest? If not, and if not my proposed international port-state-focused regulator, then who? You tell me.