Ballast water management, pollution compensation and ship recycling are the hot trends for 2017 in the maritime transport industry, which is looking to reduce its environmental impact on all fronts. Of course, mandatory IMO and government regulation compliance makes it all a little less fun, but in the end, shipping aims to become a sustainable transport industry.
IMO is putting fast track pressure on shippers. Before the 2020 sulphur cap, the Ballast Water Management (BWM) Convention will enter into force in September 2017, and it has become one of the most complex and controversial pieces of technical regulation ever agreed by IMO, concerned about addressing the problem of invasive marine organisms having damaging impacts on local ecosystems through their unwitting transportation in ships’ ballast tanks.
The technology required for ships to treat millions of gallons of ballast water is relatively new and still quite expensive to implement. In 2017, the total cost of ensuring compliance across the entire world fleet is estimated to be about US$100 billion. However, according to the International Chamber of Shipping (ICS) Annual Report 2017, the Convention’s imminent entry into force still presents ship operators with a serious challenge because of the expected lack of shipyard and manufacturing capacity needed to retrofit the new treatment systems on around 40,000 vessels over a five year period. The situation has been further complicated by the United States, which is not a Party to the BWM Convention. The U.S. has unilaterally adopted its own ballast water regulations, with which ships trading to the U.S. must already comply.
In the meantime, apart from the possible shortage of shipyard and manufacturing capacity to retrofit around 40,000 systems, many shipping companies – through no fault of their own – face critical decisions. They will potentially be required to install expensive new equipment that may not be guaranteed to operate correctly in all of the normal operating conditions they would reasonably be expected to face when ballasting and de-ballasting during worldwide service. These decisions are all the more difficult if the ships are approaching the end of their typical 25-year life.
Pollution from ships is a reality that shipowners wish didn’t exist. Super tankers are a permanent imminent threat to the environment with potential oil spills that are virtually impossible to recover from. However, thanks to IMO’s environmental conventions such as MARPOL, the Civil Liability Convention (CLC) in 1969 and the International Oil Pollution Compensation Fund (FUND) Convention in 1971, the reduction of oil spills has been impressive.
These important IMO Conventions have established a very effective global system for ensuring that those affected by oil pollution from tankers will receive high levels of financial compensation without undue delay, the costs being shared by the shipping industry and cargo receivers, making compensation payments swift, without protracted legal arguments.
IMO has a convention for everything, and ship recycling is no exception. Panama, Belgium, France and Norway have ratified the IMO Hong Kong Convention on ship recycling, and it is expected that Denmark, Turkey and others will follow suit during 2017. However, EU Member States, which originally pushed hard for the Convention’s adoption, have been slow to ratify, instead focusing their efforts on a unilateral EU Regulation on ship recycling which started to take effect in 2016. For ICS, it is fundamental that governments need to make ratification a far more urgent priority if they are serious about improving conditions in recycling yards on a global basis.
Unless the EU recognizes facilities in non-EU nations, including yards in southern Asia, it seems unlikely that sufficient yard capacity will have been approved to meet the demand for recycling from EU shipping companies once the EU Regulation fully applies, probably at the end of 2018. Of greater concern to ICS, however, is the very negative signal, which the omission of non-EU yards presents to those developing nations whose support will be needed to make the Hong Kong Convention a success. “The European Commission needs to demonstrate that the EU List genuinely exists to promote the raising of recycling standards globally, rather than being some kind of protectionist vehicle, which is aimed at promoting ship recycling yards located within the EU,” says the ICS.
Supply Chain 2017
Primer Seminario Internacional en Gestión Estratégica de la Cadena de Suministro, Abastecimiento y Logística