How shipping is changing after 11th September:
More costs and regulations, or benefits too?

The terror attacks on 11th September last year has unleashed a new wave of regulations for shipping. By IMO’s timetable, a new set of security measures will be ready for approval in December, all going well.

It was to be feared that the general panicking of the first post-terror days should lead to a rigid, time-consuming and cost-driving tangle of regulations. Thanks to a quick response, the IMO has managed to take the lead and intercept much of the loudest cries for action.
The European Union has sought to forestall unrealistic American proposals, although many have been accepted in principle, but are to be implemented in a more reasonable and practical form.
In a report published in June, the Norwegian Shipowners’ Association concluded that the liberal economy as such had not been affected in the aftermath of the terror attacks, but concedes that the potentially unstable regions of the Middle East, the Caspian Sea and Central Asia will take on a strategically more important position in the future. It may be wise to be prepared.

Shipping
The scenarios for terror not only envisage actions against shipping, but also ships – and indeed cargo – used as vehicles for terror. The meeting in May by IMO’s Maritime Security Committee lined up a number of measures to be integrated in the imminent SOLAS upgrading, which will include:
procedures for security assessment
security plans for vessel and organisation
designated persons for security onboard and in the shore organisations
international ID-cards for seafarers.

By an American initiative the introduction of AIS has been sped up. The AIS – Automatic Identification System – was set for implementation by 2008, but will now probably be in place from 1. July 2004; cruise vessels, chemical carriers and tankers already next year. This system will provide electronic tracking of all ships (within certain limitations) on a global scale.
By responders and satellites the system will provide identification by IMO-number, position, direction, etc. It was originally conceived as a safety measure; now it may also provide a security screening.

Ports and containers
A similar set of measures is to be imposed on ports, too, according to the IMO proposals. These will include port security plans and vulnerability assessments.Meanwhile the Americans have taken steps to protect their own shores. Security measures in American ports were stepped up immediately after 11th September, and the Maritime Transportation Anti-Terrorism Act was passed earlier this year. Shipping companies with ships calling American ports will have to submit anti-terrorism plans for approval by the US Coast Guard by 1. January 2003.
It may ble possible to control ships and ports, but the vast number of containers flowing along the trade lanes is quite another challenge. Containers may be used for shipping equipment for terror actions or even as explosive devices in themselves.
The IMO meeting in May decided to invite the World Customs’ Organization in the process to develop an international Constainer Security System (CSS) to function within an efficient global transportation network. Improved container tracking and better sealing are proposed, as is container scanning equipment in terminals. This will, however, take time to install and also incur time and costs on the consumers.

Transparency on ownership
The war against terrorism and terror networks has also seen more radical proposals by American politicians against tax havens and flags of convenience as alleged covers for organized crime. The core of the matter is of course the lack of transparency, a general problem for parts of our industry first raised in the drive for safety 15 years ago.
OECD has for years been concerned over money-laundering and organized crime. Transparency has become a key word, and its Financial Action Task Force (FATF) has been advocating measures like identification of beneficial owners of accounts, regulation of non-bank financial institutions, etc. In October last year the mission was extended to combat the financing of terrorism. In order to follow up the OECD framework, the issue of transparency once again came up on the agenda of IMO’s Legal Committee in May. There were two main views amongst the member states, of which some wanted a high degree of information such as ownership down to the individual shareholder. The majority, including nations like the UK, USA and Greece, considered such an approach impractical and legally dubious and regarded “effective operational control” as the crucial matter. By effective operational control the Legal Committe refers to the party who:
appoints the crew
fixes the use of the vessel
signs the charter party on behalf of the owner.

The Legal Committe has proposed that further regulation on this point should be carried out within the framework of the ISM Code. It is important to protect ships and seafarers from the potential dangers of terrorism. Most of our industry will welcome security plans, the AIS and ID-cards for seafarers.
But the doubts begin to stir when turning to the shore organisation. Port and handling fees will definitely be going up, as will terminal time.
The world trade – to which shipping is a service provider – needs as realistic level of security. The simple and efficient rather than the bureaucratic. After all the costs are to be borne by the consumers.

// Dag Bakka Jr

Back to SSG 7, August 23

Latest update 18-10-2006 8:49

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