This topic concerns the importance of having permanent means of communication between Politicians/Regulators and the Shipping Industry internationally, however, the comments that follow will concentrate primarily on the relationship between the international shipping industry and the EU, although whatever is said applies to Politicians/Regulators across the Globe.

The European Union is not a sovereign state, but for all intents and purposes it often behaves like one, and its influence on shipping certainly cannot be ignored.

In simple terms, the EU is important for shipping in two main respects.  The first is that since Europe is a major trading area, the rules which it develops must be compatible with those developed internationally.  The second point concerns the influence which the EU wields at bodies such as IMO where international rules are developed.  Often these two areas of activity are closely interlinked, with Brussels sometimes threatening to introduce regional rules unless IMO accedes to its demands.  It did this with respect to the accelerated phase-out of single tankers, a decision that had billion-dollar implications for the industry.  It also did this more recently with regard to atmospheric pollution rules, and at the moment Europe is presenting a further ultimatum to the IMO, for the introduction of regional rules for the regulation of CO2 emissions unless IMO delivers a satisfactory international agreement before the end of next year.

However, while it is often tempting to demonize the EU, there is a lot of misunderstanding about what it is or how it works.  Moreover, the EU can also be a force for good.   Pressure for change can be useful.  For example, the EU membership of Cyprus and Malta has directly led to significant improvements in the performance of these major open registers, while the EU’s assertive and systematic approach to port state control has undeniably driven up standards.

It is important to clarify that it is not appropriate for any organization to judge whether the overall concept of the European Union is a good thing or a bad thing.  The concern is strictly limited to the EU’s impact on shipping.  EU involvement in shipping issues has increased considerably in recent years, as it has expanded its political competence in relation to that of individual EU maritime administrations.    A particular cause for concern is the implications this may have for the future authority of IMO as the industry’s global regulator.

Not being a sovereign state, the EU is not currently a full member of United Nations bodies such as IMO and ILO.  However, the European Commission does enjoy observer status and, where it has the political competence to do so, it increasingly co-ordinates common positions amongst the EU States at IMO meetings, making them act as a political block.

It is also important to understand that the EU has fairly well-developed political institutions.  These can be summarised as:

• The Council, which comprises representatives of the EU Member States – in the case of shipping the EU Transport or Shipping Ministers
• The European Parliament, with some 700 representatives directly elected by the general population from across the EU
• And last but not least, the European Commission.

The European Commission is in effect the EU civil service, although it is very different from most national bodies of civil servants because it is actually responsible for initiating the majority of EU legislation, which is a national context is usually the role of politicians.  This includes most regulations that impact ships trading to and from EU ports.

This is not to say that the European Commission does not always listen to what the shipping industry has to say.  For example, when a few years back it was proposed that the statutory and classification functions of class societies should be separated, it was willing to change its mind.  The Commission does have a system of consultation with industry on new regulations and the EU and Commissioners and senior officials are relatively accessible.  However, while they may sometimes be willing to listen to the industry with regard to the details of what they may be proposing, it is often very difficult to divert the Commission from its path should this interfere with its underlying ambitions to increase its authority in relation to the individual EU Member States.  It would be much more helpful if the Commission could routinely first discuss its ideas informally with international industry representatives so that the industry can point out the pros and cons before potentially misconceived ideas become formal proposals, which are then far more difficult to withdraw or amend.

It must be stressed that the Commission as well as the Politicians/Regulators, Ministers and others have to accept that consultation cannot be ad-hoc, it has to be permanent, it has to be on a continuing basis, and it has to be with bodies such as those that represent the International Shipping Industry, who have an international perspective, and can and do form international consensus.

The Commission should view this as a partnership for the common good. This applies equally to any government in the world.   The industry and regulators in the EU or anywhere else for that matter are not and should not be adversaries.  The industry has the expertise, and the regulators should tap it.

The industry attaches great importance to maintaining close relations with the various EU institutions in order to ensure they are aware of the international implications of their decisions.  This is not always easy.

There are many current issues on which engagement with the European Commission is so important.  The one issue on which one can focus concerns the EU’s ambitions to be a full member at IMO.  This issue is much more important than some people realize.

The main concern about the prospect of a full EU membership of IMO relates to the impact this would have on the quality of IMO decision making.  For the most part decisions at IMO are currently taken on the basis of their technical merits, following intensive discussions between experts from the world’s major maritime administrations.  However, the increasing coordination of positions taken by the EU Member States means that decision making is becoming ever more politicized with the danger that technical considerations may be sidelined or overlooked.  Moreover, if IMO rules are adopted as a result of the 27 EU States acting as a block, there is a danger that other nations may not feel quite the same sense of ownership of IMO rules, and as a consequence, they may be less inclined to ratify and enforce them.

These are very complex issues.  The extent to which positions are currently co-ordinated from Brussels depends on whether the IMO rules being discussed are already subject to EU legislation, which automatically confers political competence on the Commission over the Member States.  However, the trend is very clear.  While most individual EU States, and particularly their maritime administrations, are reluctant to cede their power, the European Commission has a clear agenda of systemically increasing its political competence over maritime issues and their negotiation internationally.

It is probably fair to say that when various industry organizations wish to change the outcome of discussions, about new EU rules, they put much of their efforts into trying to influence the EU Council, which comprises the governments of individual EU States.  Provided governments also feel strongly about an issue, this can sometimes produce results.  For example, the industry was recently successful in persuading the EU not to proceed with a new Directive on civil liability in shipping, which might have seriously undermined IMO liability Conventions.  However, politics can also interfere with Council discussions and shipping is very vulnerable to ‘horse-trading’.  This is especially the case when issues such as competition rules, or measures on air pollution or CO2 emissions are led by parts of the Commission not directly involved with shipping.

The EU also now has an officially agreed ambition to become a full member of IMO, with the same rights as other sovereign states.  However, it seems that the Commission wants to ‘have its cake and eat it too’; seeking full membership for itself while retaining the membership of the 27 individual EU States whose positions at IMO it increasingly controls.

The industry remains very concerned about the negative effect that greater co-ordination in Brussels of positions adopted by the EU Member States will have on the quality of IMO decision making on issues which should be considered primarily from a technical and operational perspective, and always with the industry experts being involved from day one.

It is hoped that the above comments have conveyed the importance of responding to the influence of the EU upon the global shipping industry, something which is taken very seriously by all shipping organizations.

In particular, there is a need for articulate engagement by industry interests located outside of Europe, especially in Asia, to ensure that the consequence of this political shift in Brussels does not have an unduly negative impact on the interests of the global industry.  In conclusion, it should be stressed again, the necessity of permanent means of communication with the international shipping organizations is paramount.