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International maritime conventions and the global shipping industry - International Maritime Forum, Shanghai University

15/05/2017

International Maritime Forum
Shanghai University, 15 May 2017
“International maritime conventions and the global shipping industry”
Speech by Kitack Lim, IMO Secretary-General

Ladies and gentlemen, students,

It is a pleasure to be with you today and I am pleased to be able to share my thoughts with you at this international maritime forum.

Here in China you have experienced unprecedented economic growth for much of this century. Although the global economy and world seaborne trade have returned to growth after a drop in global trade following the financial crisis of 2008, overcapacity is keeping freight and charter rates low. Profit has been hard to find for shipping companies. Indeed, for most, survival has been the priority for the past ten years.

Yet the shipping industry must find a sustainable and viable way forward. Because shipping, as the most cost-effective way to transport the vast majority of international trade, will be central to sustainable global development and growth in the future.

A safe, secure, clean and efficient international shipping industry is indispensable to the modern world. And governments all over the world have an obligation to create a regulatory framework that allows that to happen.

IMO is a specialized agency of the United Nations, created by governments to enable them to do this. At IMO, the world's governments come together to turn that obligation into something more tangible. They turn it into a regulatory imperative.

IMO’s overall mission is to promote safe, secure, environmentally sound, efficient and sustainable shipping. And we do this in two ways. First, we develop and adopt a global regulatory regime for shipping that embraces the highest practicable standards of maritime safety and security, efficiency of navigation and prevention and control of pollution from ships.

And, second, we back this up with an extensive programme of technical assistance and capacity building, to ensure that, once adopted, the standards can be implemented evenly and effectively; to ensure that no-one gets left behind.

This framework of global standards and regulations, developed by governments at IMO enables shipping to operate safely, securely, cleanly and efficiently.

IMO’s mandate was originally limited to safety-related issues, but subsequently its remit has expanded to embrace environmental considerations, legal matters, technical cooperation, issues that affect the overall efficiency of shipping – such as how to deal with stowaways or how a cargo manifest should be transmitted to the authorities ashore – piracy and armed robbery against ships and maritime security.

Broadly speaking, IMO measures fall into three categories.

There are those aimed primarily at the prevention of accidents, casualties and environmental damage from ships in the first place. In this group you will find conventions setting standards for ship design, construction, equipment, operation and manning.

Then there is a series of measures which recognize that accidents do happen, despite the best efforts of all concerned, and which, therefore, try to mitigate their negative effects. Rules concerning distress and safety communications, the provision of search and rescue facilities and oil spill clean-up and response mechanisms, all fall into this category.

The final group is concerned with the aftermath of accidents, and, in particular, with establishing a mechanism for ensuring that those who suffer the consequences of an accident – and this refers in particular, although not exclusively, to pollution victims – can be adequately compensated.

Given how comprehensive this regulatory framework now is, I think the future will see more and more emphasis placed on IMO’s work on technical cooperation.

IMO has developed more than 50 international treaties and related standards. But the full benefits of this extensive body of international law can only be realized if their provisions are effectively, efficiently and consistently implemented and enforced. And it is the Member States, supported by the industry, who are ultimately responsible for implementing IMO measures. IMO’s technical cooperation work is vital ensure that they have the capacity to do this, especially those developing countries which may lack the relevant maritime experience and expertise.

Although founded as a strictly technical body, there is no doubt that the political and economic dimensions of IMO’s work are becoming increasingly influential and we are adapting and changing accordingly.

IMO and its members have taken the opportunity of changing times to examine the very philosophy that underpins the regulatory framework within which shipping operates.

Do we, for example, regulate in such a way that the latest technology, the best technology currently available, is required across the whole fleet, thereby raising standards universally or equally?

Or perhaps we want regulations that go further? Regulations that challenge the engineers, the naval architects, the designers, to push the envelope of technology ever further? Do we want regulations that stretch the current boundaries of technological possibility?

The result has been a philosophical shift in favour of goal-based standards, initially for ship construction. Goal-based standards allow for innovative new ways to meet the agreed goals to be developed without having to re-write the rule book every time. They encourage innovation but, at the same time, ensure that ships are constructed in such a manner that, if properly maintained, they could remain safe for their entire economic life.

They represent a deliberate move away from prescriptive regulations, which tend to become less and less relevant over time and can hold back ship designers, who are technically innovative, from being able to properly address future design challenges.

Today, we live in a world in which new technology seems poised to have a transforming impact on all our lives. Shipping is no exception.

New technologies have already brought significant changes in the way ships are designed, constructed and operated, impacting personnel, both on board and ashore. In the future, I expect technology will create a more interconnected and efficient industry, more closely integrated with the whole global supply chain.

But technological advances present challenges as well as opportunities, so their introduction into the regulatory framework needs to be considered carefully. We need to balance the benefits against safety and security concerns, the impact on the environment and on international trade, the potential costs to the industry and, not least, their impact on personnel, both on board and ashore.

The regulatory framework will need continual adjustment to keep pace with technology.

I believe technology holds the key to a safer and more sustainable future for shipping. I don’t expect one single breakthrough that will solve all our problems at once. But what we will see is real progress through the collective effect of marginal gains in many different areas.

Thanks to the opportunities afforded by new technology, shipping is, potentially, on the brink of a new era. If we think of the technologies emerging around fuel and energy use, automation and vessel management, materials and construction and so many other areas, we can expect new generations of ships that bring step-change improvements in all the areas that IMO regulates.

And, in the future, we can expect the “soft” technologies of digitization and big data to be as important in the development of shipping as the traditional “hard” technology issues that I have just mentioned.

At IMO, we also need to do more to embrace data in our work and in our decision-making processes. For example, we need to have more detailed and deeper analysis of statistics and data so that we can really understand underlying trends and causal factors behind shipping casualties; and we must make sure that additions and amendments to the regulatory framework are also based, wherever possible, on relevant statistics, studies and analysis.

The regulatory framework for shipping embraces what are deemed to be the highest possible standards that can be applied universally. But, of course, that doesn't stop others from embracing higher standards should they choose to do so.

But in an international context; in the context of an industry that needs to operate within a consistent framework that is recognized, and applied equally wherever in the world a ship may call, those higher standards must be self-applied. By which I mean there is nothing wrong with individual countries applying higher or more stringent standards to their own vessels; but they must also recognize the validity of the universal standards that apply to all ships.

The very essence of international regulation, and one of the foundations on which IMO is built, is that no advantage should be gained either by cutting corners or by unilaterally imposing higher standards.

It is a fact that, today, we live in a global society which is supported by a global economy. The potential benefits are clear: growth can be accelerated and prosperity more widespread; skills and technology can be more evenly dispersed, and both individuals and countries can take advantage of previously unimagined economic opportunities.

The broader challenge that we all face is how to ensure future growth can be achieved sustainably; how to ensure that globalization becomes a positive force for all the world's people, and not for just a privileged few.

In 2015, 193 countries, including China, adopted the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs).

This Agenda calls for action by all countries to eradicate poverty and achieve sustainable development by 2030 world-wide – and the SDGs are seen as an opportunity to transform the world for the better and leave no-one behind.

As part of the United Nations family, IMO is actively working towards the 2030 Agenda for Sustainable Development and the associated SDGs. The SDGs specifically recognize the importance of building resilient infrastructure, promoting sustainable industrialization and fostering innovation. Indeed, most of the elements of that Agenda will only be realized with a sustainable transport sector supporting world trade and facilitating global economy.

Quite apart from the key role shipping plays as the carrier of global trade, maritime activities also provide an important source of income to many developing countries. Indeed, developing countries now lead the world in some of shipping's most important ancillary businesses, including the registration of ships, the supply of seagoing manpower and ship recycling. They also play a significant part in shipowning and operating, shipbuilding and repair and port services, among others – and their presence in IMO is appropriately strong.

Maritime activity can both drive and support a healthy economy and that is why investment, growth and improvement in the shipping and port sectors are also important. They facilitate global commerce and the creation of wealth and prosperity among nations and peoples, creating a wide variety of jobs aboard ships and ashore, with beneficial impacts, both direct and indirect, on the livelihoods of others.

There can be no doubt that transport and communication are crucial for sustainable development in the global environment. If the benefits of globalization are to be evenly spread, all countries must be able to play a full and active part in the distribution system and build strong transport infrastructures. IMO's contribution towards this goal will be founded on our work surrounding implementation and capacity building.

To highlight this potential, IMO’s theme for this year is "Connecting Ships, Ports and People". It brings together the many diverse stakeholders in the business of shipping and logistics.

It enables us to shine a spotlight on cooperation between ports and ships to maintain and enhance a safe, secure and efficient maritime transportation system. It also focuses on the importance of developing and implementing ‘joined-up’ maritime strategies, both from a policy and a practical perspective. The benefits of a free and efficient flow of goods and trade extend far beyond the ships and ports themselves. As both IMO’s theme and this conference remind us, an effective interface between them can improve the lives of people everywhere.

Although IMO is primarily concerned with regulations for ships, there are countless areas where our work also impacts on ports – from safety and traffic facilitation, through security to environmental protection, we share so many areas of mutual concern.

In this respect, IMO is already an important player in the so-called ‘blue economy’. This is a very sizeable and growing sector – but the global marine environment and its resources are being degraded and over-exploited at an ever-increasing rate and scale. And conflicts in the use of ocean space and resources among the various stakeholders are increasing.

To be sustainable, human activities have to be balanced with the oceans’ capacity to remain healthy and diverse in the long term. A major part of IMO’s role is to ensure that shipping continues to make its contribution to the global economy without upsetting that delicate balance.

The world is no longer prepared to accept services or industries that are simply cost-effective. We now demand them to be safe, green and clean, as well as efficient. Through IMO, governments have sought to ensure that shipping responds to this challenge. And the significant improvements in casualty and pollution figures from ships over several decades clearly show that we have achieved considerable success in this regard. Yet, still, we seek further improvements.

Perhaps the fundamental challenge that shipping faces today is to remain economically sustainable while meeting the increasingly stringent demands of its customers, and of society as a whole, with regard to safety and environmental performance.

Shipping will have to continually adjust to new expectations – and this, incidentally, may also drive changes in the global fleet, encouraging older vessels to be phased out gradually, promoting new and more efficient ship designs and streamlining vessel operations.

Many of these new expectations are reflected in the regulatory regime developed and adopted by IMO. This may sometimes feel like an unnecessary burden to the shipping industry. But IMO does not represent the shipping industry. It represents the collective views and decisions of its 172 Member Governments; and they represent the billions of ordinary people, all over the world, who rely on shipping every day of their lives, whether they realize it or not.

So, when IMO regulates about issues like emission reductions, ship design and construction, cleaner fuel, ballast water management, container safety and so on, the overall objective is to ensure that the people of the world can continue to enjoy the benefits of shipping, in a manner that fully meets modern expectations. And that is something everyone benefits from.

Finding consensus on these and other issues, through a process of discussion among all stakeholders, is one of the great strengths of IMO. Shipping has to be regulated on a global basis. Why is this so important? Because global regulations apply equally to all. They do not allow anyone to gain an advantage either by cutting corners or by imposing unilateral requirements. They create a level playing field. And, perhaps most importantly, they ensure that ships have to comply with the same rules and technical standards wherever in the world they operate and regardless of which flag they fly.

Clearly there has to be a common approach, so that ships can trade around the world and that countries receiving foreign ships can be confident that they do not place their own safety, security and environmental integrity at an unreasonable risk by accepting them.

These are important principles. Everybody suffers if they are undermined, not just the shipping industry but the billions of people all over the world who depend on it.

Finally, ladies and gentlemen, I would like to finish with a message to the many students among the audience here today. We live in an uncertain world and so often I find myself dealing with problems and difficulties. But when I look around at all of you here today, studying to improve your own lives and to make a positive contribution to in the years to come, I really feel a strong sense of optimism and a bright future ahead.

I wish you every success in your lives, whatever you decide to do, and hope that many of you will play your part in bringing about the better, inclusive future that we are all working towards.

Thank you.

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