As shipping vice president of Shell Trading and chairman of the Oil Companies International Marine Forum (OCIMF), Jan Kopernicki is well qualified to assess the EU Commission’s legislative proposals. He insists that ‘It is not a simple black and white case between the good guys and the bad guys – far from it. What we have is a successful intervention by the EC which has resulted in the international discussion moving on far more quickly.’ Holder of one of the most influential posts in shipping, Jan Kopernicki put his views to DNV Forum in London in mid-July.

I would first clarify the misunderstanding that Europe was in some way interfering with the normal shipping jungle. In fact this has been a successful intervention by the EC which has helped to accelerate the international discussion. It is not right to criticise the European structure for causing a problem this is far from true. Just look at what the EC has achieved in a very short space of time it has addressed the issue of ship age fairly constructively, and caused IMO to re-think the phase-out timing of single hulls under Marpol 13. We in OCIMF are interested in achieving international solutions, because if you pass purely European regulations youll quickly find that there are ships on passage that dont belong to any European country but which could have an accident in European waters. Any legislation restricted to Europe alone will not address those ships. An international solution is essential.

Hence I believe that the urgency that the Europeans have brought to this, sadly in part caused by the Erika incident, has been very helpful on the international stage. The EC has a timely opportunity to play a strong catalyst role in the international arena. It can get everything it needs and more for Europe using international mechanisms. It already has some valuable achievements behind it: the issue of the retirement age of tankers has been resolved it could be argued that this would have happened at some stage, but now it has been done. There are issues about better sharing of information; we have the classification discussion coming up. So much has been accomplished.

Shipowners must take responsibility
OCIMF takes the view that we have to change shipowner behaviour if we are to significantly reduce the likelihood of oil pollution: one must recognise that OCIMF members charter only some 3040 per cent of oil-tanker tonnage. The bureaucrats say that the IOPC Conventions are about compensation to the victims of spills about funding but not about safety. They say SOLAS is about safety and the IOPC about compensation. These are separate issues in the eyes of the bureaucrats. My view is that you dont have to pay compensation if you dont have any accidents, so we have to stop the accidents happening in the first place. What were trying to do, in the discussion about compensation levels and methodology, is to create a situation where the behaviour of individual shipowners is predisposed to safety, so that accidents dont happen.

Though insured at the moment, the owner of a ship can just say, Ive reached my level of responsibility under the international conventions. Ive paid everything I have to pay. We have inherited a system designed more than 30 years ago. Now the sums involved are becoming quite large, but the main problem is that companies must pay compensation for spills that they had nothing at all to do with. In the case of Erika, for example, Shell is paying between USD 1520 million as our contribution under the IOPC Fund Convention for something we were clearly not involved in.

Complete clarity
Under the IOPC scheme, claimants are paid promptly by an international agency to which they have direct access. No company or individual need go to court; they can go directly to the IOPC Fund and present their claim. The IOPC has a very good record of paying in legitimate claims cases and todays system has the advantage that, under sometimes very different national legislations, there is complete clarity about who is responsible and who will pay.

OCIMF took the pragmatic view that we would intervene and support a supplementary mechanism that oil receivers would pay for, but with the quid pro quo that there should be a discussion about the overall structure of international compensation arrangements, in particular the CLC Convention, with the aim of increasing the participation of shipowners. We were concerned that the Europeans were in favour of a local version of this supplementary mechanism as a regional fund solution.

International solution
This would begin to undo the international mechanism that already existed because we would see countries in the Far East, for example, looking at this European intervention and asking why they should belong to the existing international scheme. And there are some countries which, because of the enlargement of the current scheme, feel they should not pay for spills not of their making.

So, OCIMF intervened to fully support an international solution which we hoped would address European concerns adequately and would provide a supplementary compensation fund (provided initially by oil receivers). This we are progressing very quickly. Most importantly, we believe that shipowners need to be more involved. There are any number of mechanisms by which they could take a more realistic share of the responsibility for funding for example by restructuring the CLC Convention but this should not delay implementation of the Supplementary Fund.

We strongly agree with the EC that this has to be addressed and we at OCIMF have had high-level talks with the EC and can sense a common spirit seeking to solve the problem. In order for this International Supplementary Fund to work, it must be a voluntary system, so countries opt in. Were very keen to have as many countries as possible opt into the supplementary tier. Therefore the entry into force criteria should not be set too high or few countries will opt in well end up with one or two countries, probably European, opting in and other countries refusing. So, this is not solely a European discussion.

European Maritime Safety Agency
It is difficult to conceive of the EC without an MSA and theres certainly scope for co-ordinating activities. One of the things that interests Shell as an oil company is the issue of the Paris Memorandum (PM) and the way in which countries use their PM rights to review ships. Some countries such as Britain and the Netherlands and there are many others regularly and rigorously inspect ships and detain them if they are of poor quality. I believe that countries such as these make a tremendous contribution to safety because they observe their PM obligations. The one thing that governments can do that companies cannot is to detain sub-standard ships and to advertise the detention publicly.

However, some other countries within the EU have much weaker coastguard structures. I believe this Safety Agency will act as a catalyst for national developments around Europe to achieve a more consistent PM framework. I suspect that this is a better model than having an overarching central system.

The actual shape of the MSA is important, and to me, it would be better for it to be a catalysing, co-ordinating agency than an attempt to replace the national systems. It might be helpful in setting guiding norms: currently there are issues of co-ordination regarding standards and ports of refuge to give just two examples.

A more difficult question arises from that whether the EU should have its own seat at the IMO. Also, should the EU have a block vote on behalf of European countries in its own right at the IMO Assembly? This is a very contentious matter, and the idea is one which has little support amongst many European governments. So we are a little way off a United States of Europe in the maritime area for the moment at least.

The European Marine Safety Agency, once established, should perhaps see its role as a facilitator in addressing its currently agreed responsibilities. The Commission should move cautiously and enter discussions around added responsibilities with care. What we dont need is more regulation. The problem today is that companies fail to obey the current rules. Weve got plenty of rules: SOLAS, MARPOL, Classification theyre all in place, and we certainly do not need more. What we do need is for these processes to deliver what the label says on the tin.

Market perspective
There has been concern that the EU could end up with fewer flagged vessels. But I believe there is little evidence to support this. It was evident after the Erika incident that a large number of substandard ships migrated away from some parts of Europe and went elsewhere, which is an issue for multinational companies like us. We dont want to do business with these ships anywhere. But the market today is transparent right across the globe. In any case, most of the oil-market segments are over-supplied with huge ship building programmes. The market is going through one of its worst periods in over 10 years. So, in a sense, the discussion is slightly academic.

Cabotage restrictions
A more significant problem is the cabotage rules in Europe. The Commission has these firmly in its sights, but there are some very unusual cabotage restrictions which preserve low-quality coastal operations in some European countries. We have seen, from the Erika case and others, that small ships can cause just as much damage as VLCCs, and coastal traffic falls squarely into this category. These cabotage restrictions also protect all tonnage not covered by IMO rules. We are very concerned, as are classification societies, about these cabotage-protected fleets. Theyre not good in an economic sense. They dont promote safety and theres always the risk of a sub-standard coastal vessel colliding with an international vessel. So again this is a matter for urgent international discussion.

In essence, though, I feel that the EC proposals are a catalyst to positive change, and will certainly help smooth the way for maritime nations entering the Union as part of its proposed expansion. However success will be measured by the extent to which international solutions are identified and fostered the environment, after all, does not recognise political boundaries.