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6th Annual BP Shipping CEO’s HSSE Forum

February 24, 2011

6th Annual BP Shipping CEO’s HSSE Forum
Address by Mr. E.E. Mitropoulos, Secretary-General, IMO
24 February 2011
Ladies and gentlemen,
I cherish the opportunity to be with you today and thank John Ridgeway for inviting me to speak to you. I always relish the prospect of exchanging information and ideas directly with representatives of the industry and I view the process very much as a two-way street; not only as a good chance for me to tell you about the concerns, priorities and challenges on IMO’s current agenda, but also to glean feedback from you about how things appear from your perspective.
While not related to BP’s offshore exploration and exploitation activities, these annual meetings, of which this is the sixth, are, in themselves, a testimony to the importance the company places on safety and environmental matters.
And yet BP’s credentials and the value it places on operational safety and environmental performance were put to meticulous scrutiny in the context, and in the aftermath, of the Deepwater Horizon incident of April 2010 – an incident that should be considered not just in simple commercial terms but also in terms of the impact it had on a company poised to maintain a positive brand image. What happened last year showed how tragedy and misfortune can befall even those who set high benchmarks and, while it is not my intention to discuss the incident itself, I do think BP deserves credit for the way it has responded to the incident, assuming its share of responsibility and striving to put things right.
Although it was not shipping-related, the devastating impact the Deepwater Horizon oil spill had on the marine environment and on the ecosystem and wildlife of the Gulf was met with immense sadness by the maritime community. More than that, the loss of 11 lives caused great distress and sympathy for the victims and their families.  Soon after the enormity of the accident became clear, I asked that the report of the investigation into it be submitted to IMO as soon as possible after it had been concluded, so that we might move swiftly to introduce, into the regulatory regime of the Organization, whatever lessons might be learned from it in order to enhance safety and environmental protection in the offshore industry and strengthen, should that prove necessary, the provisions of any relevant IMO instrument.
While the efforts of the offshore industry to extract the oil our society so much depends upon (from great depths below the surface of the sea and land, equally in equatorial and polar regions, under extremely adverse weather conditions, in unusually inhospitable environments) should be recognized, we should, nevertheless, spare no effort to ensure, as long as it may take in order to move to other sources of energy and beyond, that offshore operations take place under conditions of maximum safety for those conducting them and maximum care for the marine environment.
From IMO’s perspective, both the Deepwater Horizon and the Montara incident of 2009 in the Timor Sea should be viewed as wake-up calls to strengthen our regulatory regime to ensure an adequate response to any similar events in the future.  In this context, our Legal Committee, prompted by the Government of Indonesia following the Montara incident, has recommended that the Organization’s strategic plan include civil liability and compensation issues in case of transboundary oil pollution damage caused by offshore exploration and exploitation activities.  The issue will be revisited by the Committee in the coming April.
Let me move now to specifically shipping-related matters. As shipping company executives, your roles demand that your principal concerns are commercial. You are in business to make money – and this is something that I understand very well. But I think there is also an increasingly clear understanding, throughout shipping, that ensuring your operations are safe and environmentally sound can also have a positive effect on your overall commercial performance, even if your costs in some areas have to rise in order to achieve this.
Once you take delivery of new ships, your most important assets, in many ways, are the seafarers, who operate them; the masters, officers and crews, who are your decision-makers, managers and representatives on the front line. And, in spite of how worthy or comprehensive the safety and environmental policies you adopt at head office may be, they are worthless if the people at the sharp end lack the training, expertise, energy and motivation to implement them properly.
The human element in shipping has long been a prime concern for IMO. The adoption, last year, of a comprehensive set of amendments to the STCW Convention and Code was the latest in a long line of IMO measures of which the objective has been to ensure that seafarers are indeed fit for purpose for the duties assigned to them. The amendments aim at bringing the Convention and Code up to date with developments since their initial adoption in 1978 and further revision in 1995, and enable them to address issues that are anticipated to emerge in the foreseeable future. Set to enter into force on 1 January 2012, they are designed to ensure that the necessary global standards will be in place to train and certify seafarers to operate technologically advanced ships for some time to come.
Without going into too much detail, it is interesting to note that, as well as containing specific requirements for training in modern technology (such as ECDIS and dynamic positioning systems and updating the competence requirements for personnel serving on all types of tankers), the amendments also include requirements for training in marine environment awareness, leadership and teamwork, vessel security and piracy response – all clearly reflecting the heightened responsibilities and additional stresses with which today’s seafarers have to cope.
And it was very much with this in mind that the Manila Conference also agreed a series of new provisions on the issue of “fitness for duty – hours of rest”, to provide watchkeeping officers aboard ships with sufficient rest periods. Fatigue has been found to be a contributory factor to accidents at sea, and this measure, which is consistent with the corresponding provisions of ILO’s Maritime Labour Convention of 2006, will play an important role in promoting safety and preventing casualties.
I mentioned piracy and, of course, this has been a problem that has blighted all sectors of shipping for far too long, costing the world economy between 7 billion and 12 billion US dollars per year. Moreover, recent events have indicated that tanker traffic off the coast of Somalia and in the Gulf of Aden now seems to be a particular target for hijack and ransom by pirates, as evidenced by the capture, two weeks ago, of the ULCC Irene S.L. off the coast of Oman – hardly surprising, I suppose, given the value of the cargoes being carried. Our responsibility to seafarers on this issue must be at the forefront of our minds and, with the period for seafarers to be held hostage now averaging in excess of 6 months and, as I speak to you, with over 685 of them in hostage situations, we must coordinate our actions to expedite the end to this merciless and increasingly violent criminal activity.
Last year, the IMO Council agreed to make combating piracy a central theme of IMO’s work during 2011 and we have developed a multi-faceted action plan designed to address the problem at several different levels. As an indication of how strongly the international community feels about this matter, the UN Secretary-General came to IMO Headquarters earlier this month to help us launch this effort and add his personal support to it.
The “theme” that will underpin our anti-piracy work this year speaks of an orchestrated response – a reflection of the fact that the problem has become too entrenched and deep-rooted to be solved by any single entity. The United Nations, governments acting collectively or individually, military forces, shipping companies and operators such as yourselves, ships’ crews and several others all have a part to play and we all need to do what we can in what must be a collective effort.
Time does not permit me to present an exhaustive overview of our anti-piracy action plan. But let me give you a flavour of the kind of activity we are pursuing. During 2011, we will seek to:
• one: increase pressure at the political level to secure the release of all hostages being held by pirates;
• two: review and improve the IMO guidelines to Administrations and seafarers and promote compliance with industry best management practices and the recommended preventive, evasive and defensive measures ships should follow;
• three: promote greater levels of support from, and coordination with, navies;
• four: promote anti-piracy coordination and co-operation procedures between and among States, regions, organizations and industry;
• five: assist States to build capacity in piracy-infested regions of the world, and elsewhere, to deter, interdict and bring to justice those who commit acts of piracy and armed robbery against ships; and
• six:  provide care, during the post-traumatic period, for those attacked or hijacked by pirates and for their families.
It is unrealistic to expect IMO to supply the “magic bullet” to solve the problem. Nevertheless, through these, and other initiatives, and in collaboration with others, we feel we can make a real difference. But I think Mr Ban hit the nail on the head when, at the launch of our action plan, he said: “although piracy manifests itself at sea, the roots of the problem are to be found ashore”, before adding “piracy is a criminal offence that is driven by economic hardship, and that flourishes in the absence of effective law enforcement. The only truly successful way to address the problem in the long-term is through a strategy that focuses on deterrence, security, the rule of law and development.”
In the meantime, no effort should be spared to alleviate the situation and, in that context, it would be remiss of me not to stress that the shipping industry has a duty to protect itself. Shipping companies must ensure their ships rigorously apply IMO guidance, including the industry-developed Best Management Practices, in its entirety. Any ship – every ship – venturing into the western Indian Ocean region must comply with the recommended measures: 
too many large ships seem to think they are invulnerable, but experience has clearly shown that this is not the case – in particular when it comes to fully laden tankers with relatively low freeboards. Again, I am not just talking about policies adopted at boardroom level but about making sure that, through whatever means necessary, these policies are put into practice by the people on board your ships. That is where it really counts.
Let me turn now to environmental matters. The preservation of the earth’s atmosphere is perhaps the most significant challenge to our environment today – and there can be no doubt that atmospheric pollution and the emission of greenhouse gases are the environmental “hot topics” of the moment. Indeed, IMO, and the shipping community at large, have been working for some time towards an effective regime to combat and reduce the effects of both.
Atmospheric pollution is addressed in MARPOL Annex VI. It was adopted in 1997 and set, for the first time, limits on sulphur oxide and nitrogen oxide emissions from ships’ exhausts; prohibited deliberate emissions of ozone-depleting substances; and put a global cap on the sulphur content of fuel oil. It also introduced the concept of Sulphur Emission Control Areas (SECAs) to allow for further emission reductions in specially designated sea areas.
In 2008, IMO adopted amendments to Annex VI, which entered into force in July 2010 and will see further reductions ushered in, progressively, over the next few years.
With regard to the emission of greenhouse gases, or GHGs, even though shipping is the most energy-efficient mode of mass transport and only a modest contributor to global CO2 emissions (2.7 per cent in 2007), this has not stopped our collective quest for further improvements in energy efficiency and emissions reduction, especially in view of the inevitable growth in sea transport in line with increases in global population and international trade. Indeed, IMO is in the final stages of developing a robust regime to regulate shipping emissions at the global level.  It consists of three distinct ‘building blocks’: technical and operational reduction measures (the development of which is at a very advanced stage) and market-based measures (on which the Organization is making good progress in pursuance of a workplan set to culminate this year).
The control of GHGs from shipping has been a complex and difficult task from both a conceptual and a technical perspective and, in my view, there can be no denying that the development of technical and operational measures is a substantial achievement worthy of considerable praise.
But the political aspects of the issue have proved just as difficult, if not more so, impeding our Member States from reaching consensus on it.  Following the most recent meeting of our Marine Environment Protection Committee in October 2010, some States, party to MARPOL Annex VI, proposed amendments to that Annex to make mandatory certain key aspects of the technical and operational measures. Although circulation of the draft amendments was opposed by some other States, those proposed are scheduled to be considered by the Committee in July with a view to adoption.
Last October’s MEPC also debated extensively how to progress the development of suitable market-based measures for international shipping, following the submission of a comprehensive report by an Expert Group, which had carried out a feasibility study and impact assessment of several possible market-based measures submitted by Governments and observer organizations. An intersessional Working Group session, to be held next month, will take this work forward and report to the next MEPC meeting.
Throughout all this, one thing that should not be overlooked is that the industry and its regulators share common aims. GHG emissions reduction is a quest on which we are jointly embarked and in which success will produce a “win-win” situation. After all, improvements in vessel efficiency will result in lower fuel consumption, from which everybody benefits, while also helping significantly to protect the world’s climate.
I believe that it is essential that the maritime community at large demonstrates that it has both the capability and will to take the required action on GHG emissions. The alternative is to risk that the responsibility for designing the most suitable response to the issue would be placed in the hands of those to whom the nuances of the shipping industry are less well understood.
Ladies and gentlemen,
IMO, as the international regulatory body for the industry, has been, and continues to be, the focal point for, and the driving force behind, efforts to ensure that shipping becomes greener and cleaner. Moreover, as befits a heavy industry operating in a very fragile yet crucial setting, shipping as a whole, and the tanker sector in particular, has developed a clear sense of responsibility with regard to its environmental credentials. Figures clearly attest to the fact that there has been a substantial reduction in marine pollution over the last 15 years, especially with regard to the amount of oil spilled into the sea, despite the massive increase in world seaborne trade.
Looking ahead, there are several IMO Conventions that have yet to enter into force (e.g. the Ballast Water Management Convention).  It is imperative that this happens soon in order to provide clarity and a level playing field for the industry. In the meantime, effective implementation of existing measures must remain a high priority. The industry can help with both: by pressing Governments to ratify those conventions still outstanding and by supporting capacity-building efforts wherever possible.
Of course, accidents still occur, despite our best efforts to the contrary. But, looking at the broader picture, every occasion in which a ship becomes involved in a pollution incident or a major casualty must be set against the millions of trouble-free, clean and economically efficient tonne-miles that the industry achieves every day.
This is a record to be proud of, and it is due, in no small part, to the significant and genuine change that has taken place in recent years in the way many shipping companies approach the environmental and social aspects of their operations. Many, and I am sure those of you here today are among them, are increasingly arriving at the view that good environmental and social stewardship actually makes for good business sense too.
I would like to conclude these remarks by returning to where I began. In the current climate, in which considerations such as those I just referred to have unprecedented prominence, responsible shipping companies have to re-evaluate how they view their seagoing staff. Those at the quality end of the market will increasingly value the benefits to be gained from employing seafarers who are properly qualified and trained and have the competence needed to manage today’s ships efficiently and safely – and, even if they may add a little more to the wages bill initially, the savings that can be achieved through decreasing shipboard incidents and accidents are eventually favourably reflected on the balance sheet.
The importance of quality human resources in all industries is high. But in the service sector, which counts shipping among its number, it is surely paramount. Safety, security, shipping's environmental credentials and, indeed, the whole future sustainability of the industry are all dependent to a great extent on the cultivation and retention of a capable and effective manpower resource. With good people in the industry, the basis for its future is sound.
Thank you.