The International Chamber of Shipping (ICS) has raised concerns with governments about preparations worldwide for issuing tens of thousands of seafarers with new certificates for security-related training by 1 January, as required by the 2010 amendments to the IMO Convention on Standards of Training Certification and Watchkeeping for Seafarers (STCW 2010).

In a written submission to IMO, ICS has suggested that IMO Member States might give consideration to the possibility of an extended “grace period” with respect to Port State Control enforcement of the new certification required under STCW 2010.

STCW 2010, Regulation VI/6, stipulates mandatory minimum requirements for security-related instruction for all seafarers, which, where relevant – such as for Ship Security Officers as defined by the ISPS Code – requires certificates of proficiency to be issued by administrations to seafarers from 1 January 2014.

Since the amendments were adopted, ICS has gone to great lengths to advise shipping companies of the transitional measures for these new requirements, as set out in Section A-VI/6 of the STCW Code, which are different to those concerning the transitional measures that apply to other changes introduced by STCW 2010 and which are being phased in between now and 2017.

ICS is concerned that any certification that STCW requires governments to issue might not be fully in place by the 1 January deadline and that ships could potentially encounter difficulties during Port State Control inspections.

ICS Secretary General, Peter Hinchliffe, explained “We understand that the training and familiarisation required by STCW 2010 has only just recently been approved by some maritime administrations, whilst others may not yet even have these arrangements in place. This could present serious difficulties for companies that need to ensure that the seafarers they employ are trained and certificated as required by STCW 2010.”

He added “For the most part this is really just a technicality since most existing seafarers have already undergone necessary levels of training and instruction as required by the ISPS Code. Given that certification is entirely a government responsibility we think that a short delay in PSC enforcement can be justified.”

The ICS submission to IMO, which suggests the possibility of an extended “grace period” with respect to Port State Control enforcement of the new security training certification, has been made to the first session of the new IMO Sub-Committee on Human Element, Training and Watchkeeping (HTW) which supersedes the STW Sub-Committee within the new IMO Committee Structure. The HTW Sub-Committee will meet in the week of 17 February.

Notes to Editors:

Advice to shipping companies about the STCW security training requirements is contained in the ISF Guidelines on the STCW Convention including the 2010 ‘Manila Amendments’ published in 2011 – see attached.

The ISPS Code is the International Ship and Port Facility Security Code, which is mandatory under the SOLAS Convention and was adopted in 2002 in response to the ‘9/11’ terrorist attacks.

Today, at the United Nations (UNFCCC) Climate Change Conference in Warsaw (COP 19), the International Chamber of Shipping (ICS) will advise a United Nations event on the economics of mitigation that reducing CO2 emissions is an economic ‘no brainer’ for the global shipping industry. Further efforts by industry to improve fuel efficiency and reduce CO2 emissions from ships – which carry about 90% of global trade – is already a matter of enlightened self interest.

ICS, which is the principal international trade association for shipowners, will explain that fuel is the shipping industry’s largest variable operating cost. In the last 5 years alone, fuel prices have increased by about 300%, and are expected to increase by a further 50%-100% due to the imminent switch to low sulphur fuel, soon to be required for most ships by separate International Maritime Organization (IMO) rules.

“The fuel costs for a typical ship carrying iron ore are already about US$3 million a year. For the latest generation of mega containerships they could be as much $30 million a year” said ICS Director External Relations, Simon Bennett. “The high cost of fuel means that market forces are already providing shipowners with every incentive they need to continue improving their fuel efficiency and reduce their CO2 emissions. Otherwise shipping companies will simply not survive.”

With the full support of the shipping industry, the worldwide entry into force in January 2013 of amendments to the IMO MARPOL Convention makes shipping the first industrial sector to have a binding global regime in place to reduce CO2 emissions.

“In addition to the new IMO regulations to improve the efficiency of new ship designs, the mandatory application of Ship Energy Efficiency Management Plans is now giving additional impetus to fuel efficiency measures that are already being taken by much of the industry.” said Mr Bennett. This includes measures such as operating ships at slower speeds, and adjusting trim (the balance of weight which affects how ships move through water).

The shipping industry remains committed to working with governments at IMO to help deliver further measures to improve fuel efficiency from ships. The immediate focus at IMO, pending the conclusion of a replacement to the Kyoto Protocol in 2015, is the development of a mandatory system for the monitoring and reporting of the fuel consumption and CO2 emissions by every individual ship in the commercial world fleet. This is fully supported by the industry and is something on which ICS is about to make a detailed submission to IMO with respect to a possible way forward that might be acceptable to all nations in both developed and emerging economies.

The International Chamber of Shipping (ICS), the global trade association for shipowners, has written to the French Government to raise concerns about a new requirement for foreign shipowners to provide information to their French customers about CO₂ emissions, using a detailed methodology that has not been discussed internationally.

ICS believes that the unilateral application by France of these new CO₂ reporting requirements to foreign ships cuts across the principles of global regulatory uniformity and the primacy of IMO as the regulator of international shipping.

The new and very detailed rules that have been added to the French Transport Code apply across all transport modes, although the Director General for Maritime Transport is responsible for their enforcement in the maritime sector.

ICS has therefore suggested that the Director General for Maritime Transport should advise that these requirements will not be enforced on international shipping pending the outcome of discussions on the monitoring and reporting of fuel consumption and CO₂ emissions currently taking place at the International Maritime Organization (IMO).

The IMO Marine Environment Protection Committee is now in the process of developing global regulations for the mandatory monitoring and reporting of fuel consumption and CO₂ emissions by ships trading internationally.  ICS fully supports the development of these measures at IMO and wishes to avoid any impediment to their adoption for global application.

Simon Bennett, ICS Director External Relations, explained: “We anticipate that the methodology for reporting that will be agreed by IMO Member States through amendments to the MARPOL Convention will be very different to the methodology specified by the new French requirements.  The IMO requirements should also be tailored to the special characteristics of international shipping, and will be the product of international consensus.  The immediate implementation of these French regulations is a real concern because shipping is a global industry requiring adherence by governments to a uniform global regulatory framework if it is to operate efficiently.”

ICS has reminded France of the difficulties that would be created if other coastal states were to implement their own unilateral requirements for the reporting of CO₂ emissions by ships.

Mr Bennett added: “The global maritime transport system would be very challenged indeed by the administrative burden of providing information that required the use of different methodologies and national formats for reporting given that cargo ships can call at a very large number of countries during the course of a year.”

Shipping companies are still trying to understand the detail of the new CO₂ reporting requirements, the English translation of which has only recently come to the attention of the global shipping industry.  But serious concerns are already being raised by international companies about the validity of the methodologies that have been developed by France, as set out in the ‘Methodological Guide for Transport Services’ produced by the Ministry of Ecology, Sustainable Development and Energy.

The development of a global system for the monitoring and reporting of CO₂ emissions from ships will be considered by the next meeting of the IMO Marine Environment Protection Committee in March 2014.   It is also the subject of a draft EU Regulation proposed by the European Commission.

Article L. 1431-3 of the French Transport Code came into effect for foreign shipping companies in October.

The Chairman of the International Chamber of Shipping (ICS), Mr Masamichi Morooka,  has written to the Chinese Minister of Finance, encouraging the Chinese Government to continue its efforts to find a solution to the problems created by the application of Value Added Tax (VAT), since 1 August, to the transport and logistics services provided by ‘Wholly Foreign Owned Shipping Companies’.

The problems exist because it is much harder for foreign shipping lines – as opposed to Chinese companies – to reclaim the 6% VAT (and a 0.8% VAT surcharge on ocean freight) that is now collected by shipping agencies in China, and so avoid passing this on to their overseas customers.  The unintended consequence is that foreign carriers are being placed at a competitive disadvantage to Chinese shipping companies.

One of the reported impacts is that hundreds millions of dollars of shipping contracts with foreign shipowners that are normally concluded in China are now being concluded in other jurisdictions where the new VAT rules do not apply.

ICS – which represents the world’s national shipowner’ associations and over 80% of the world merchant fleet – has emphasised to the Ministry of Finance the great importance that is attached by the international shipping industry to the successful resolution of VAT issues that have been raised by foreign shipping companies which collectively transport a very significant proportion of China’s international trade.

ICS Director of External Relations, Simon Bennett, explained: “The Chinese Government is deeply conscious of its commitments towards the maintenance of a ‘level playing field’ in maritime services, and has no wish for the new arrangements concerning the application of VAT to international shipping services to have a negative impact on the competitiveness of Chinese exports, the vast majority of which is carried by ships.  We have therefore welcomed the positive indications that have been given by the Chinese authorities during recent meetings with foreign shipping company representatives in Beijing that steps are being taken to address those concerns.”

He added: “However, these issues are very complex and we recognise the major challenge for the State Administration of Taxation in trying to find a solution for international shipping that will be consistent with China’s broader objectives as it seeks to move towards a system of VAT in other parts of the Chinese economy.”

Notes to Editors:

• The application of VAT to transport and logistics services provided by ‘Wholly Foreign Owned Shipping Companies” was outlined in Chinese Circular ‘Cai Shui No 37’ on 24 May, with effect from 1 August 2013.

• ICS is the principal global trade association for commercial shipowners and operators.  Its membership comprises national shipowners’ associations in 35 countries representing over 80% of the world merchant fleet at those international bodies which impact on shipping.  This includes the United Nations International Maritime Organization (IMO) and the World Trade Organization (WTO).

London is, without doubt, “still the shipping capital of the world,” according to the Chairman of the International Chamber of Shipping, Masamichi Morooka.  But he also suggested that London should not rest on its laurels and that a truly world class centre would wish to retain its position for the very long term and have an ambitious strategy for achieving this.

Speaking on behalf of the world’s shipowners at the London International Shipping Week conference in the UK capital, Mr Morooka outlined what he felt as an employee of a major non-UK shipping company, was needed for a city to be a first class maritime centre.

He remarked that London’s continuing success suggested that a large concentration of beneficial ship ownership was not in fact necessary to be successful, as was also the case with its merchant banks, or indeed the British car industry.  But in the long term this strategy would only work so long as the foreign companies concerned were committed to stay.

Highlighting the need for a critical mass of shipping people, a trustworthy legal system, a sound infrastructure, good communications and genuinely international outlook, Mr Morooka said a pre-eminent worldwide maritime centre need to be a ‘one stop shop’ providing immediate access to the expertise and support services required to conduct international operations on a twenty-four-seven basis.

London is the inventor of marine insurance, is home to one of the largest and oldest classification societies, houses the Baltic Exchange, is the financial capital of the world, and has a commitment to open markets and free trade principals, he pointed out.

“As a centre for maritime business services, London still truly lacks a comparable rival,” he said.

He concluded by pointing out the need for any great maritime centre to enjoy strong support from its national government and city authorities and to have policy makers who treat the maritime sector “as being vital to the health of the rest of the economy.”