Theofilos Xenakoudis, Director, Worldwide Business Operations at IRI/The Marshall Islands Registry, explains why the choice of flag is so significant to helping shipowners and operators navigate the regulatory agenda.
As we move into a new decade, the shipping industry faces regulatory renewal and an imperative for environmental sustainability. The challenge of meeting the International Maritime Organization’s (IMO’s) initial strategy on the reduction of greenhouse gas (GHG) emissions from ships will be a big task for the maritime supply chain. The IMO is engaging in what it has termed a “two-pronged approach” towards addressing GHG emissions from international shipping through regulatory work, supported by capacity-building initiatives.
The initial strategy sets out targets for a reduction in GHG emissions from international shipping under identified “levels of ambition”. One of the targets seeks to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008, while, at the same time, pursuing efforts toward phasing them out as soon as possible this century. This requires significant action to be taken within this new decade. The greatest challenge is likely to be in overcoming uncertainties with transitioning away from fossil fuels, seen by many as the necessary step to meet the ambitious 2050 emissions target.
Key issues for debate
Achieving the 2050 emissions reduction target will take cooperation, transparency, and a continued dialogue between regulatory authorities and the ship owning community. Flag States will play a critical role in managing this transition, supporting and working with shipowners and operators well in advance of implementation dates. For the Republic of the Marshall Islands (RMI) Registry, and International Registries, Inc. and its affiliates (IRI), which provide administrative and technical support to the RMI Maritime and Corporate Registries, this means addressing the key challenges shipowners face and collaborating to find solutions.
While the emissions target is perhaps the most significant challenge on the agenda for the next decade, the IMO’s GHG strategy is not the only regulatory change that must be addressed. Currently, the most urgent issue for nearly every owner and operator is complying with the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI, 0.50% fuel oil sulphur content standard, which entered into force on 1 January 2020. We anticipate strict enforcement in many regions, particularly in Paris and Tokyo Memorandum of Understanding countries. From the RMI perspective, the 0.50% standard will be enforced under the same regulatory framework in place today, as was used for enforcement of the previous 3.50% standard and the current 0.10% standard in Emission Control Areas (ECAs).
An adequate regulatory framework is in place for flag States to evaluate non-availability situations, technical problems with scrubbers, and other compliance matters on a case by case basis with all circumstances taken into consideration. This is where the right flag State can make a significant impact in supporting owners and their operations. Not all flag State administrations are equal in the support they can provide when navigating these challenges. The RMI Registry has a team in place with strong knowledge of the guidelines, rules, and technical aspects of these regulatory challenges who are ready to help and find solutions.
The RMI Registry team, led by Captain David Bruce, coordinates the activities of the RMI delegation to the IMO. It has been particularly busy raising the concerns of shipowners and operators regarding the implementation of the MARPOL Annex VI sulphur emissions regulations and understanding the complexity of the change. The team has also been focused on issues around Ballast Water Management (BWM) and amendments to the International Convention for the Safety of Life at Sea, which are all significant changes for owners in the immediate future.
The team also provides the IMO with an important source of technical and operational expertise. It is supported by subject matter experts who work closely with a broad spectrum of industry representatives.
This year MaryAnne Adams, Deputy Commissioner of Maritime Affairs of the RMI, was elected to chair IMO’s Carriage of Cargo and Containers Sub-Committee. The RMI Registry team acts as an impartial third-party and maintains open lines of communication with shipowners and operators worldwide on the developing regulatory agenda. This means we always have an ear to the ground when it comes to changes that impact operations.
A strong support network
Not all flag States are able to offer this level of expertise and insight to their owners. Therefore, it is vital for owners to consider the level of engagement their flag State demonstrates in terms of regulatory input. They should also carefully consider the services their registry can provide in helping them adjust to the rapidly evolving regulatory landscape. As one of the world’s leading ship registries, we have over 400 employees across 28 offices worldwide and an unrivalled level of technical experience supporting a fleet of nearly 4,700 vessels and 172.8 million gross tons.
With a network of offices across every major maritime hub, IRI has local people on the ground to help our owners translate these regulatory requirements into action; working for owners in their time zone, language, and in their best interest. Our Piraeus office is staffed by a seasoned group of dedicated registry and former seafaring professionals, providing service to not only the Greek market, but also owners in Italy, Cyprus, Turkey, Monaco, and the Black Sea region. They are a go-to source of insight for our local owners and partners.
Encouraging knowledge sharing
Hosting panels and knowledge-sharing events for our clients, colleagues, and the maritime community is one way in which our local teams engage with stakeholders. This type of engagement activity improves the understanding and best practices for the entire community, creating a safer environment for all. Across the company we host or participate in hundreds of events each year.
Many of these events relate specifically to new regulations or operational changes, while others look at the bigger picture. IRI recently hosted a panel discussion at the Piraeus Marine Club with nearly 200 attendees. Leading experts presented on marine casualty investigations on the sea floor, which primarily aim to thoroughly investigate very serious marine casualties to determine contributing causes and prevent them from occurring again.
Moderated by Rear Admiral (RADM) Kevin Cook, the audience learned how major advances in technology, particularly autonomous underwater vehicles, are allowing ever more complex sea-bed investigations to take place and are driving down the costs of investigations. The speakers included Andrew D. Bowen, Director of the National Deep Submergence Facility at Woods Hole Oceanographic Institution, and Captain Morgan J. Turrell, Deputy Director of the Office of Marine Safety at the National Transportation Safety Board (NTSB).
As a responsible flag State looking to provide as much added value as possible, we believe these types of events offer important learning opportunities for the entire community.
Of course, while we allocate considerable resources to supporting the global maritime community, we never lose focus on our primary role. Our high standards and ability to work closely with owners and industry stakeholders has resulted in the RMI maintaining an excellent port State control record, meaning a very small percentage of vessels under our flag have been detained for any reason. For owners flying the RMI flag, the major benefit of this is that their vessels are less likely to be unnecessarily detained.
Raising benchmarks for quality
The RMI Registry has a perfect rating in the International Chamber of Shipping’s annual ‘Shipping Industry Flag State Performance Table’ for 2018/2019, a report which provides an overview of the performance of each of the world’s flag States against 19 performance indicators. We are very proud of the fact that the RMI Registry is the only one of the top three registries to achieve a positive score in every category.
This reputation has been earned in large part because the RMI employs strict pre-qualification requirements and runs an intensive and continuous program of inspections across our fleet. This ensures our standards are met, but we do accept that issues can occur on even the most carefully run ship. Working with owners and stakeholders to anticipate common problems is an important part of our work.
Of the three largest registries, the RMI Registry is also the only flag State administration to have earned the United States Coast Guard’s QUALSHIP 21 status for 15 consecutive years. This certificate of excellence identifies vessels operated to the highest standards and delivers tangible benefits to shipowners and operators trading in United States waters. Ships can only apply for this qualification if registered to a QUALSHIP 21 approved flag State, and now may also seek the E-Zero designation if they meet the requirements for environmental compliance and demonstratable environmental stewardship.
We see this qualification as another point of pride. Afterall, how we work together to manage regulatory change, and to demonstrate environmental stewardship in the coming years will be business-critical for the entire shipping community; flag States included. 2020 will be a definitive year for us all and will test our ability to respond to regulatory change in a positive way. Doing this successfully will require honesty, transparency, and collaboration.
At IRI, we understand the pressures placed on shipowners, operators, managers, and charterers as well as fuel suppliers and port authorities and are committed to supporting the community in managing this, and all other changes in future. The RMI will continue to be the flag of choice for Greek owners into the next decade and beyond.
* Director, Worldwide Business Operations at IRI/The Marshall Islands Registry, Piraeus Greece