ICS Board Discuss Costa Concordia Disaster Report, CO2 MRV and Ship Recycling

The Board of Directors of the International Chamber of Shipping (ICS) – the principal international trade association for shipowners, representing all sectors and trades and over 80% of the world merchant fleet – met in London today (5 February).

Issues considered by ICS members included: frustration with the failure of Italy to submit a full maritime casualty report to the International Maritime Organization (IMO) following the ‘Costa Concordia’ cruise ship tragedy which occurred over a year ago; the continuing discussions at IMO and elsewhere on the best means of achieving further carbon dioxide (CO2) emissions reduction from ships; and serious concerns that the IMO Convention on Ship Recycling, adopted to improve standards throughout the world’s ship recycling yards, is in danger of being undermined by regional measures being discussed by the European Union.

ICS Commits to CO2 MRV

The ICS Board reviewed recent developments with respect to the international regulation of CO2 emissions from ships. This included proposals by the United States and the European Commission, and others, concerning the establishment of a mandatory system of Monitoring, Reporting and Verification of emissions (known as ‘MRV’).

ICS Chairman, Masamichi Morooka, explained: “Our meeting agreed that ICS will fully support the concept of MRV, provided that any measure adopted is developed and agreed at IMO, and that it will be simple to administer and primarily based on fuel consumption measured by bunker delivery notes.”

“However,” added Mr Morooka “ICS support for the development of an MRV mechanism does not imply acceptance of MRV being used for the eventual development of any other Market Based Measure, or the mandatory application of energy indexing measures to existing ships.”

ICS is currently developing a detailed position on how MRV might work, but is waiting for formal submissions to be made by governments at the next meeting of the IMO Marine Environment Protection Committee in May.

ICS is optimistic that the United States will submit a paper to IMO that will address some (though not all) of the concerns previously raised by ICS in response to earlier US proposals made last year. In particular, it is hoped that the US will acknowledge the central role of bunker delivery notes, and that it will avoid any suggestion that expensive or impractical emission monitoring equipment should be installed on board ships (as has been suggested by some elements within the European Commission).

IMO has already adopted a comprehensive package of technical and operational measures to reduce CO2 emissions, and shipping is the only industry which already has CO2 reduction regulations in force at a global level. ICS therefore welcomes the recent announcement by the European Commission that if further measures are developed to address CO2 that this should be done globally inside the IMO.

At their meeting, ICS members’ noted with satisfaction that, for the time being at least, it seems that the EU will give much less emphasis to developing its own Market Based Measure on a regional basis (including a mooted regional emissions trading scheme for ships) and that as an interim measure the EU instead wishes to focus on a global system of MRV.

“This constructive stance now being taken by Europe is very positive,” said Mr Morooka. “But with respect to MRV, we are still waiting to see if firm proposals will be made at IMO by the European Commission. At consultations we have attended in Brussels, some EU officials from the Climate Change Directorate still seem to be thinking in terms of a developing a regional measure first. In the absence of firm EU proposals being submitted to IMO it is difficult for industry to contribute to the MRV debate at European level meaningfully. This is something which ICS is very keen to do.”

Notwithstanding ICS’s support for MRV, its priority remains to help ensure that the technical and operational measures adopted by IMO, which came into force in January 2013, are successfully implemented. This includes the Energy Efficiency Design Index (EEDI) and the mandatory use of Ship Energy Efficiency Management Plans (SEEMP). ICS believes that the further reduction in emissions that will be delivered by the SEEMP, which are now being utilised by tens of thousands of existing ships worldwide, should not be understated.

Ship Recycling

The ICS Board expressed serious concern about proposals being considered by the European Union for an EU Regulation on ship recycling.

ICS believes that the EU Regulation being considered by the EU Parliament risks completely undermining the International (Hong Kong) Convention for the Safe and Environmentally Sound Recycling of Ships, which was adopted by IMO in 2009. The EU proposals include a fund to which EU ship operators would have to pay in order to ensure that their ships are recycling in accordance with EU standards, rather than those already agreed by governments at IMO. The ulterior motive of the European Parliament seems to be a wish to create work for ship recycling facilities in Europe.

The IMO Convention was adopted to address legitimate concerns about environmental and working conditions in ship recycling yards which for the most part are located in Asia. “If the EU Regulation goes ahead in its current form, it is very hard to see how the IMO Convention can ever enter into force.” said Mr Morooka.

“As well as damaging the EU registered fleet, undermining the Hong Kong Convention will do little to help workers in the recycling yards in developing nations who will continue to be engaged in dismantling the majority of the world’s redundant ships, and whose workload is already increasing in view of the chronic over capacity that exists throughout the shipping industry.” said Mr Morooka. “It must be hoped that the governments of EU Member States, which are signatories to the Hong Kong Convention, will start to see sense and stop these damaging proposals before it is too late.”

Casualty Reports

The ICS Board reviewed the continuing response at IMO to the ‘Costa Concordia’ cruise ship tragedy, and welcomed the measures that have so far been taken forward relating to passenger safety and evacuation procedures.

“The response of IMO so far has been measured and reasonable and we have been impressed by the commitment amongst governments to avoid knee jerk reactions” said Mr Morooka. “But IMO is under increasing pressure to take forward far more radical steps in advance of Italy publishing the complete results of its accident investigation, which it has still singularly failed to do. Given the seriousness of the disaster, which happened over a year ago, this failure by Italy is simply unacceptable. We still have no official understanding of what the underlying causes were with respect to an accident that really should never have happened.”

ICS believes that the ‘Costa Concordia’ tragedy has highlighted the seemingly inadequate obligations on the part of flag states to submit the results of accident investigations to IMO. The impasse created by the failure of Italy to report definitively on such a serious casualty indicates that action may be needed in an area where other flag states are also commonly guilty with respect to less high profile incidents which are nevertheless serious and from which important safety lessons could be learned.

The ICS Board agreed that, in discussion with governments, ICS will take forward proposals to IMO as to how the obligations of flag states with respect to casualty reports might be strengthened. These will probably draw on the obligations that the EU now places upon its Members States, with a view to seeing if these might be applied on a global basis.

ICS, February 6, 2013

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