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For the first time, OECD Member countries have assessed competitive cost advantages that can be reaped by shipowners who violate basic rules and standards of shipboard safety and environmental protection.
A recent report, "Competitive Advantages Obtained by Some Shipowners as a Result of Non-observance of Applicable International Rules and Standards", also examines the roles of the industry bodies responsible for monitoring international rules and standards, and considers ways of ensuring fuller observance of rules.
Although most shipowners operate their vessels correctly, difficult economic circumstances have led some shipowners to take advantage of their freedom to set operating standards by failing to conform to rules and standards for shipboard safety and the protection of the marine environment.
There is considerable scope for shipowners to determine the operating standards of their vessels and to deliberately avoid compliance with internationally agreed rules and standards. These shipowners may reap financial advantages that can amount to a substantial share of the running cost of a vessel. Most non-compliance is minor, representing only small savings to the shipowner. But financial implications can be much larger if, for example, the shipowner continues to keep a sub-standard vessel trading during the period before the deficiency is detected, while at the same time benefiting from the temporary cost savings of not undertaking the corrective upgrading.
The problems occur, in part, because flag-state administrations frequently are not in a position to fulfil their responsibility to implement international rules and standards. Furthermore, bodies in charge of ensuring and/or monitoring compliance (port state authorities, classification societies acting on behalf of flag states, chartering and marine insurance interests and maritime unions) are not all equally diligent in monitoring and following up when non-observance of international rules and standards is detected.
Problems also arise because penalties applied to sub-standard vessel operations, if they exist at all, are relatively low compared to the economic advantages obtained from non-observance of international rules and standards.
There is no single solution to prevent operation of sub-standard vessels. Flag states and classification societies acting on their behalf, insurers, charterers and other interested parties have responded by stepping up efforts to ensure shipowners' compliance with national and international maritime rules. In addition, the International Maritime Organization has strengthened the obligations incumbent upon flag states, while port inspections have been improved through regional agreements in Europe, Asia and the Americas. However, additional efforts are needed to achieve further long lasting improvements in vessel operating standards by combating non-observance of the rules and standards. Preventive and remedial measures will be needed, as will improved co-ordination by all those involved in international maritime transport.
This report aims to describe the situation for all those involved in maritime transport, and to support the work of the International Maritime Organization, the body primarily responsible for defining and implementing the international rules and standards for safety and pollution prevention.
The full document is available in Acrobat format.
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