Greek Business File, April - May 2019, No 120
In European terms 2019 is a critical year because it is a year of European elections and the year of Brexit. The renewal of the institutions will bring a new European Parliament, new Commissioners and a new President of the European Council. Hence, more scope for maritime lobbying by shipowners organizations.
by Dr Anna Bredima*
What is the influence of Greek shipowners in the context of these shipping organizations? Very strong indeed not only through Greece’s 20% control of the world fleet and 50% of the EU fleet. It is also the result of Greek personalities leading these organizations. At this very moment, Greeks have the presidency in three: Intercargo (Mr Dimitris Fafalios), BIMCO (Mr Tasos Papagiannopoulos) as well as ECSA (Mr Panos Laskaridis). Moreover, it is the result of the fact that Greeks have developed consistently pragmatic policies in shipping which have proved successful over the years. Thus they are being followed or imitated.
The 52 000 merchant ships plying the oceans are a global force economically and strategically. The geostrategic added value of major fleets for their respective countries should not be underestimated. For instance, merchant ships in times of emergency are subservient to naval vessels of NATO. Hence, merchant ships also boost the geopolitical importance of their country diplomatically. In most countries around the world, shipowners are organized in associations which undertake lobbying activities at national, regional and international level. Over the years, shipowners discovered the merits of enhanced cooperation over “going alone”. In view of the repercussions of the multitude of complicated issues at stake this cooperation is crucial.
Such issues indicatively are:
environmental regulations related to climate change and air emissions from ships (NOX/SOX/GHG/CO2), ocean pollution with plastic, ballast water management, sustainable ship recycling;
Taxation issues, tonnage taxes for ships, VAT for ships, state aids for shipping companies;
Commercial aspects including market access for ships, multilateral/bilateral free trade agreements with maritime clauses.
Piracy, digitalization in shipping, autonomous ships, cybersecurity of ships, ports and shipping companies, immigration, search and rescue at sea
Social issues, attraction to the seafarers’ profession, maritime education.
The role of all organizations, be it regional, international or sectoral, is to lobby the main intergovernmental organizations, i.e., the IMO and the EU. Most shipowners associations internationally are members of ICS (International Chamber of Shipping) (1). The ICS was established in 1921 and represents 80% of the world merchant tonnage. It comprises the national shipowners’ associations of 35 countries representing ships of all types. The ICS primarily lobbies the main intergovernmental maritime organization the IMO (International Maritime Organisation) which is an agency of the United Nations. The IMO adopts international conventions dealing with maritime safety and protection of the marine environment. For instance: MARPOL/SOLAS/STCW/ Ballast Water Management Convention/Ship Recycling Convention. Both the ICS and IMO are based in London. The ICS lobbies other intergovernmental organizations that deal with various aspects of the shipping activity:
The ILO (International Labour Organisation) is a United Nations agency based in Geneva. It adopted the Maritime Labour Convention (2006) dealing with all aspects of the seafaring profession, working hours, health and safety on board ships.
The WTO (World Trade Organisation) is the source of international rules on trade standards, market access and trade liberalization. It is based in Geneva.
The OECD (Organisation for Economic Cooperation and Development) based in Paris adopts rules on taxation of shipping and on trade liberalization.
The ITF (International Transport Forum) is a recently established most active agency of the OECD.
The CSG (Consultative Shipping Group) is a forum of government representatives basically from the OECD countries dealing with all aspects of shipping.
In almost a century of operation the ICS has developed a remarkable expertise on maritime safety/ environmental issues (technical issues) which nowadays extends to legal, commercial (trade, insurance, taxation) and social issues. Around the ICS there is a constellation of other shipowners’ organizations. Some are regional like ECSA (European Community Shipowners Associations) and ASA (Asian Shipowners Association), both of which represent all ship types.
The ECSA, which was set up in 1965 and is based in Brussels, represents shipowners Associations from 21 Member States of the EU and Norway. It is open to associations from EU Member States, the European Economic Area and the European Free Trade Association (EFTA). It represents 40% of world shipping.
ASA founded in 1992 consists of eight associations from Australia, China, Hong Kong, India, Japan, Korea, Taipei and FACS (Federation of ASEAN Shipowners).
FACS, established in 1967 comprises shipowners associations of Indonesia, Malaysia, Philippines, Singapore and Thailand.
ASA represents 50% of world shipping. It is based in Singapore (2007). Although it started off as a low key organization, nowadays it is gaining ground and joins very often the position papers of ECSA/World Shipping Council. Other organizations are sectoral specialized to a particular ship type: INTERTANKO, (tankers), INTERCARGO (bulk carriers), CLIA (cruise vessels), WSC -World Shipping Council (containerships), INTERFERRY (ferries). There is also one organization encompassing shipowners, shippers and brokers: BIMCO (The Baltic and International Maritime Council). BIMCO has gained considerable expertise on ports and standardization of shipping contracts (maritime clauses in charter parties). It represents 65% of world shipping and is based in Copenhagen.
Maritime Cluster Organisations
Apart from the various organizations representing shipowners interests, several organizations have been set up over the years representing various aspects of the so-called maritime cluster of activities. For a non exhaustive list at European and international level:
For ports: ESPO (European Sea Ports Organisation), FEPORT (Federation of European Private Ports and Terminals), IAPH (International Association of Ports and Harbours)
For shipbuilders/marine equipment manufacturers: SEA EUROPE
For classification societies: IACS (International Association of Classification Societies)
For marine insurance: The International Group of P&I Clubs and IUMI (International Union of Marine Insurance).
For shippers: ESC (European Shippers Councils) and GSF (Global Shippers Forum).
For seafarers: ITF (International Transport Workers Federation), ETF (European Transport Workers Federation).
For dredgers: EUDA (European Dredging Association)
For tugs: ETA (European Tug Owners Association)
For pilots: EMPA (European Maritime Pilots Association)
For sea drilling: IADC (International Association of Drilling Contractors), IMCA (International Marine Contractors Association)
For the marine environment: Intermepa
For ship recycling: ISRA (International Ship Recycling Association)
For oil companies: OCIMF (Oil Companies International Marine Forum).
Maritime Lobbying activities
All these associations promote the interests of their members vis-a-vis national governments, the EU, the Asian countries, the IMO, ILO, WTO, OECD and CSG. In order to be more eff ective, sometimes position papers are tabled on behalf of more than one organization in order to exercise more pressure visa- vis the recipients of the papers.
For instance, in the IMO: ICS, INTERTANKO, INTERCARGO, BIMCO have tabled several joint papers concerning the reduction of CO2 emissions from ships. Their cooperation over the years has taken a more formal aspect uniting under the Round Table of Shipping Organisations.
In the EU: ECSA, WSC, CLIA have tabled common position papers regarding the legal treatment of consortia in maritime liner transport of containers and the extension of the block exemption regulation.
In the EU: ECSA, ITF/ETF, ICS, CLIA regularly table common position papers concerning the treatment of seafarers e.g. the non-criminalization of the seafarers in case of accidents causing maritime pollution, the protection of seafarers from piracy, multiple visas for seafarers. In other instances, however, ECSA and ITF/ ETF may have opposing views regarding the treatment of other aspects relating to the seafaring profession.
Many different views
There are cases where the interests of some organizations clash and there is fierce competition between them about the view that will prevail in order to influence the EU or the IMO. For instance: the ECSA had different views from the ESC concerning the legal treatment of liner consortia, maritime alliances and megaships in 2018. Heated debates may occur not only between organizations having conflicting interests, they may occur within the same organization regarding the basic direction of its policy on a hot issue. For instance, policy formulation on reduction of CO2 emissions from ships is one of the most complicated issues. There is an EU tendency to adopt more stringent rules on environmental issues than the rules of the IMO, whilst shipowners preponderantly favour the IMO rules in order to have a level playing field internationally.
“Educate” the EU officials
The lobbying of the EU /IMO by the shipping organizations may take various forms: position papers with their views on a given issue; meetings for briefing of EU/IMO offi cials on an issue; meetings or seminars to “educate” the EU officials on the particularities of maritime transport. For instance, offi cials of the European Commission or Members of European Parliament (MEPs) are not familiar with the particularities of the tramp and liner sector in shipping as they tend to think that all merchant ships are liner (container) ships. The tramp sector which accounts for 75% of world shipping is invisible to most!
Another common erroneous perception is that they confuse the notion of “shipper” with “shipowner”. They mean “shipowners” and they call them “shippers”. Additionally, they are not familiar with the specificities of working conditions on board ships and propose social legislation which cannot be applied on board for practical reasons and is rather addressed to shore side employment industries. The European Commission officials regularly change posts by the time they have a fully operational understanding of the sector, thus educational activity is repeated frequently. It is a modern version of the ancient myth of Sisyphus!
Lobbying is addressed to the following DGs of the European Commission: DG MOVE, DG COMP, DG CLIMA, DG TRADE, DG ENV, DG TAXUD, DG EMPL,DG MARE, DG ENER. Lobbying on technical aspects may also be addressed to EMSA (European Maritime Safety Agency). The same occurs within the European Parliament where European and national associations lobby by providing amendments or opposing amendments to the TRAN COMMITTEE, the ENVI COMMITTEE, the LEGAL COMMITTEE the EMPL COMMITTEE and the INTA COMMITTEE.
The ground work is usually done via the parliamentary assistants of the MEPs, who draft the European Parliament reports. Shipping organizations also maintain close relations with the maritime attachés in the permanent delegations of the EU Member States in Brussels in order to lobby them on pending legislation at the Council of Ministers. When the lobbying is not confi ned to a specific issue but deals with broader issues like the importance of shipping for the EU, the work is entrusted to well known consultant firms. In carrying out their lobbying activities shipowners associations are driven by two basic considerations:
Firstly, since shipping activity has no frontiers and is global, global rules are required for a global industry. Such rules can be adopted by the relevant international organizations. Regional and national rules partition the markets and are counterproductive. Secondly, shipping requires open markets. Shipowner associations steadily support liberalization policies of maritime transport internationally. Protectionism is a very short sighted policy, where there are no winners and all are losers. Shipowners associations are united behind these two tenets but it has taken decades for them to fall into line. Greek shipowners, however, have always been fervent supporters of both tenets. As mentioned at the beginning of this article, 2019 will create new political realities at least at EU level and, thus, provide new challenges. International shipping in general and Greek shipping in particular, must use their not always evident, yet, important clout to infl uence future developments in favour of global and liberal rules and policies. Shipping is the enabler of world trade. Maritime lobbying is the key enabling shipping to play its role more successfully. After all as the Spanish poet Rafael Alberti wrote “las palabras abren puertas sobre el mar (the words open doors over the sea)”.
*Senior Policy Advisor on European Aff airs Cyprus Union of Shipowners. Disclaimer: The views of this article are personal views of the author.