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The Maritime Transport Committee met on 19/20 June 2003 to review work undertaken and consider future projects in relation to its programme of work, notably in the areas of security and safety. In addition, during what has become the Committee's traditional industry session, the P&I insurance industry provided the Committee with a very useful insight into day to day business of the Clubs.
Industry Seminar
P&I Clubs presentation. The International Group of P&I Clubs provided the Committee with an insight into its workings, and raised a number of issues that are relevant to work currently being undertaken by the Maritime Transport Committee.
In particular, the Committee noted that as non-profit mutual associations the Club members cover their own risks, therefore there is a genuine incentive to keep standards high in order to reduce the risk of incidents that could generate claims. The International Group noted specifically that Clubs actively assess the standard of ships that are provided cover, and have frequently deleted substandard tonnage.
This approach is consistent with the MTC's own view (as expressed in its Policy Statement on Substandard Shipping) that insurance could be a powerful tool to further marginalise the ability of providers and users of substandard shipping to profit from their disregard of international regulations and standards.
The Committee was delighted to receive the International Group's assurance of full cooperation in the Committee's project (see below for further details) that will further investigate the role that marine insurance can play in addressing the problem of substandard shipping.
Election of officers
The Maritime Transport Committee reconfirmed the Chairman and elected new members of the bureau. The composition of the Committee's bureau is as follows:
Chairman: Mr. Bruce Carlton (United States)
Vice Chairmen: Mr. Rysanek (Canada) Mrs. Dilling (Denmark), Mr. Baek (Korea)
Extended Bureau: Australia, Greece, Japan, Poland, United Kingdom
[Please Note: The election of Poland to the Extended Bureau is subject to final confirmation.]
New Participants
The Committee welcomed Estonia, participating for the first time as an observer.
Shipping Policy Developments
This is a standing item on the Committee's agenda. The Committee discussed several policy developments, including recent maritime agreements, new legislation, important safety related activities, and Greece's achievements under the rotating EU presidency.
Security in Maritime Transport
Update of maritime security activities
Participants brought each other up to date with the latest security measures being undertaken by governments and industry. This included new security regulations and measures taken in respect of the IMO International Ship and Port Facility Security (ISPS) Code, the revised SOLAS Convention, and the United States Container Security Initiative (CSI). The extent of security related measures in place, or in the process of implementation, highlighted the high priority that has been accorded to this issue by all participants at the MTC.
Risk Assessment and Economic Impact Report
The Committee reviewed the second report undertaken in the context of its current work on maritime security. This report attempts an assessment of risks faced by the maritime transport network, and a detailed appraisal of costs associated with measures that have, or will be implemented, in response to possible terrorist activities in the maritime sector.
A key finding of the report that will be of particular interest to Governments is that while the cost of implementing these security related measures is high, the financial cost (putting to one side for the moment the human cost) of not taking every opportunity to reduce the risk and the incidence of terrorist attacks is considerably higher. Also, the report found that some of the measures being implemented have a real potential of improving the efficiency of transporting trade, to the extent that in the long run this could largely off-set the costs of implementing the security measures.
The Committee also declassified the report, and it will be made available publicly during the month of July.
Alternative approaches to international maritime transport
The loss of the tanker "Prestige" in November 2002 and other maritime disasters have had severe consequences for the marine environment and have threatened the livelihood of thousands. These incidents, however, have caught the attention of both governments and citizens, and there is increasing pressure for remedial action to be taken.
The MTC noted work currently being undertaken by the UN, IMO and ILO and considered the contribution it could make to the overall efforts underway to effectively minimize the incidence of such catastrophes. The Committee noted a proposal submitted by the Secretariat for some original and innovative work to be undertaken in an effort to explore all possible solutions that could provide an effective response to the ongoing risks posed by substandard shipping. The Committee will be defining areas where it can bring its own expertise to bear, and will be developing its own agenda, in consultation with other agencies, to undertake further analysis on this issue. The Committee will review these proposals in the lead up to its next meeting in November 2003.
Safety and the Environment
Possible incentives
One of the elements of the Policy Statement on Substandard Shipping released by the MTC in April 2002 was that the MTC members would work with industry to develop the concept of incentives for quality shipowners. While both governments and industry considered this to be a very positive approach to encourage shipowners (and others, such as cargo interests, brokers etc) to attain and maintain high standards, there were some concerns over the possibility of incentives turning into subsidies, and the possible distortion of competition by incentives being applied unevenly or selectively. Industry was also concerned about the potential complexities of any schemes that might be implemented. On the other hand, specific disincentives for substandard operators attracted some interest.
The Committee discussed the points raised by industry. It recognised that it had concentrated on the quality of the ship but that in order to take a more informed decision on the follow up to give to the issue it would also need to complete the picture by including the human element and by expanding on incentives schemes already in existence. The Committee decided to further refine the concept and to revert to the matter at a later stage.
Marine Insurance Proposal
This is another element of the MTC's Policy Statement on Substandard Shipping. The MTC approved a project proposal to undertake, with the assistance of the marine insurance industry, a study on the international marine insurance industry. The purpose of this study is to establish whether it would be feasible to remove cover from substandard ships while still maintaining the necessary risk spreading coverage for the rest of the industry, and without affecting the cover afforded to genuine victims of incidents caused by substandard ships.
This work will be carried out in consultation with the P& I Clubs and with the International Union of Marine Insurers (IUMI).
WTO
A member of the WTO secretariat brought the Committee up to date with the negotiations on trade in services according to the Doha calendar. It was noted that progress had been slow and that it had not proved possible to meet the deadlines set out by that calendar. Although maritime was not distinct from other services it was an essential component of the overall negotiations.
Participants in the services negotiations had been exchanging bilateral initial requests since 30 June 2002. Between 31 March and 12 June 2003, 27 of the 145 WTO Members had submitted initial offers, and of those ten had a maritime component. It was noted that, for the maritime element, it had been decided to start with best offers made during previous negotiations.
A draft ministerial Declaration will be issued in July 2003 and progress will be reviewed at the 5th Ministerial Conference in Cancun in September 2003.
Support Measures
The Committee reiterated the priority it places on its work on transparency of support measures, and Delegations undertook a commitment to provide, by 30 June 2004, data on support measures in place as at end December 2003.
Dialogue with Non-member Economies
The MTC discussed the outcome of the January 2003 Workshop held with a number of Non-member Economies. Comments from both OECD and non-OECD participants suggested that the Workshop had been a success. The Committee reaffirmed its wish to maintain the excellent contacts with its non-member partners, and will endeavour to more closely involve them in its mainstream work. The Committee also approved in principle the organisation of a further seminar or workshop towards the end of 2004.
Future Meetings
The next session of the Maritime Transport Committee will take place on 13/14 November 2003.
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