After years of calling for there to be a global level playing field established at the IMO, it seems some within shipping appear to have become less enamoured of this strategy. Within a very short time, other shipping bodies and organisations such as LR were expressing their disapproval of the idea that regional regulation should be even contemplated.
Move forward a month to this week’s delayed April MEPC 75 meeting at the IMO and we see similar calls being made by environmentalist NGOs. These calls came after the meeting apparently decided to opt for an industry plan for decarbonising existing ships.
According to the NGOs, the plan will do nothing to speed up decarbonising shipping and may in fact have the opposite effect. Many of these NGOs are Europe-based and are strong supporters of EU environmental plans.
It is well recognised that much of IMO regulation in recent years has come about or is being considered as a result of pressure from the EU directly and through states that are members of both the EU and IMO.
Leaving aside the underlying issue of decarbonisation which has generated these recent calls, the idea that regional regulation on any issue is somehow bad for shipping is one that does not enjoy universal support despite protestations to the contrary by international shipping bodies.
Shipping is a diverse industry – in fact it could be said that it is not a single industry at all but a collection of sectors that beyond running ships have very little in common. As an international regulator, the IMO’s role is limited to ship construction and operation and does not extend to regulating the ports and territorial waters that ships operate in.
Nation states are free to impose what ever rules they like on ships operating under their flag and solely in their own territorial waters. If signatories to some parts of MARPOL they are supposed to apply IMO rules to some of the environmental aspects of ships but there is no sanction if they chose not to.
For ships operating internationally, it is the port states that really have the clout. As we have seen with open loop scrubbers, some nations are quite happy to permit ships under their flag to install an operate open loop scrubbers outside of domestic waters but are not prepared to let other flag ships operate scrubbers in their waters.
In ballast water treatment too there are regional differences and we are now in the situation whereby ships that trade to the US may not be considered to have a compliant system on board even if it is acceptable in other parts of the world.
For ships that trade globally, the attraction of one set of rules is obvious but for the reminder of vessels – and numerically these are probably greater – a regional approach is much more desirable. Again taking ballast treatment as an example, ships which have been built for the sole purpose of trading in say Mediterranean or Baltic and North Sea waters, the fact that no same risk area has been established under the Ballast Convention effectively requires them to fit and operate a treatment system that has no obvious purpose in protecting the environment since species already move freely through the waters.
It is not only short sea vessels that have a good argument against needing to have a level playing field. Ore carriers built specifically to trade between Brazil and China are a point in question. It is a moot point to say that having different standards puts some owners at a disadvantage because that argument only holds true for ships wanting the freedom to trade where and when they want. The owner that builds to meet the standards of its planned operating zone does not have the freedom to switch trades. Of course if an owner decides to switch to operate elsewhere then the ship may have to brought up to different standards but that is a question for the original owner to contemplate.
We have built ships suited and designed for different trades – is it really any different to build ships suited to different trading areas?
Aside from the environmental considerations, economic impact also needs to be addressed. In some areas of the world, marine trade is important, but the countries concerned and the cargoes they need moved are not attractive to international operators for a variety of reasons. Here the ships involved are usually older and time limited so updating to environmental standards demanded by states thousands of miles away can be economically damaging.
There are of course downsides to regional regulation with regard to port operation and commodity security for the states concerned. It is quite easy to see that if the EU does decide that the IMO has been tardy and go its own way on regulating emissions or imposing levies, then shipping lines will have to respond in some way. In the case of non-European liner operators, the potential for additional levies against European operators’ ships would be a very real possibility. An alternative would be for services to run to terminals on the fringes of the EU – perhaps in North Africa, Turkey or potentially even a UK outside of the EU from 2021.