What Should be the Role of Class?

The role of vessel classification societies continues to change dramatically. As the role and relevance of class is hotly debated, MR/EN picked the brains of the industry's major classification societies to analyze both their individual and collective future.

ABS President Calls For Class Overhaul

If class is to remain relevant, it must remake itself for the modern world, says ABS president and CEO Robert D. Somerville. He recently told delegates to the World Maritime Forum in St. Petersburg, Russia that "self regulation will continue to provide an effective method for establishing and enforcing standards only if all elements of the industry recognize that substantive overhaul is needed." Somerville highlighted the remarkable, and continuously improving safety record of the international shipping industry but conceded that, "in the eyes of government and the public, the self regulatory approach no longer meets expectations." Good as the safety record may be statistically, "it is not good enough," he said.

With every tanker spill, regardless of how infrequent they may be, "the effectiveness of the existing maritime safety system will be called into question," he said, "and it will be found wanting. The result will be further regulation."

The ABS chief executive highlighted four principal elements that have changed the environment in which class and the shipping industry operates.

1. The public demands have increased;

2. The nature of ship owning has changed;

3. The technology available to class societies is far more sophisticated; and

4. The pressures on the shipbuilding industry are different to those of the past.

"It is time for the maritime safety system to recognize these changes and adapt to them in a rational and effective manner if the classification profession is to retain any relevance in the future." Comparing the current pressures faced by all sectors of the industry with those of 30 years ago, Somerville noted that "today's VLCC will almost certainly be built in a shipyard where price and production efficiencies are the driving forces. That means keeping the design simple and putting as little material into the ship as possible." Somerville believes that too many of today's shipowners see class as an intrusive watchdog. "They (shipowners) are under intense commercial pressure," he noted. "There is little capability or incentive to maintain the vessel, to repair coatings or to install anodes in the way that was done in the past. That owner will run that ship until his classification society determines it no longer meets rule requirements, and he will do everything possible to delay that day or defer repairs. The concept of class as a partner is dead." In calling for an industry-wide effort to analyze and improve the existing system, Somerville stressed six key issues for class that should be addressed. "It must address the issue of what role and what power is to be ascribed to the classification societies, " he said. "Does the industry want class to be the policeman? If it does, give us the power of enforcement."

Noting the constant criticism of the current system by which the shipowner is invoiced for class services, Somerville says the industry must address the issue of who pays the class society. "It is immaterial to us who pays, but we must charge for the services we provide," he said. "If the industry decides the current system is effective and workable, then support it and put these criticisms to rest." ABS welcomes the recent decision by the IACS Council to work towards the adoption of common scantlings and strength criteria. "It is no longer reasonable to place classification societies in the position where shipyards play one off against another for the sake of 250 tons of steel in a VLCC with a lightweight of some 38,000 tons," he said, urging industry support for the unified rule approach.

Somerville sounds a note of caution. "Much as I believe this reinvention of class is needed, the classification societies cannot and will not undertake this reform by themselves," he conceded. "It is not just that the collective courage does not exist. Any such unilateral action by class would be doomed to failure. For the radical overhaul that I am suggesting to be effective, it must be orchestrated with and accepted by the industry."

Tanker, Bulker Safety Among GL Priorities

By Dr. Hans G. Payer, GL

Current ship safety issues concerning tankers and bulk carriers are among the priorities of Germanischer Lloyd (GL). There is no doubt that overcapacity in the shipbuilding industry and the corresponding increase in competition has brought pressure upon owners, shipyards and class societies to reduce the fabrication cost of newbuildings. This may result in a threat to ship safety as well as to the class societies. That is one reason why GL welcomes the recent proposals put to the IMO for uniform goal based standards for new construction. GL believes that IACS, with its technological database and expertise is the right body to enter discussions with a view to creating such standards. The maritime industry is starting to realize the importance of a worldwide agreement on adequate minimum new building standards. We know that mature and responsible shipowners are agreed that future ships will need a common approach, and they are prepared to pay for better ships.

As the industry acts to deal with the early phasing out of single hull tankers, there has been much debate and controversy over the performance of double hull tankers. To this I can add that after 10 years of experience with double-hull designs, GL's own damage statistics show no significant trend of structural failures in cargo and ballast tank areas due to design or fabrication deficiencies. Problems of down grading due to corrosion and wear persist, and need the same attention of owners and class as is the case with single hulls. The well-established CAP regime and the mandatory introduction of a condition assessment scheme (CAS) for single hulls is considered to provide generally improved control over tankers. On the related issue of double hulls for bulk carriers, single-hull vessels upgraded to the latest IMO/IACS requirements can meet adequate safety demands. However, GL's newbuilding classification records show orders for an increasing share of double side bulk carriers of handy, handy max and laker sizes. These vessels are expected to out-perform conventional bulk carriers in terms of repair requirements and off hire characteristics. Accident statistics already confirm their superiority particularly in respect of low-energy impact casualties. Since their introduction through the OPA 90 regime, Emergency Response Systems (ERS) have proven their effectiveness on many occasions. Using advanced tools of analysis and a data base of computational models for the large number of subscribing vessels, GL has developed its own ERS to provide fast track evaluations of the residual strength of a ships' hull in accident and distress situations. This includes the advice on optimal ballasting as well as the calculation of the likely outflow of oil. In this way, we are increasingly able to provide practical information to masters and rescue centers in counterbalancing and discharge decisions, which significantly reduce the risk of a catastrophic outcome. We also believe that the use of ERS will fundamentally improve the assessment of the risks associated with decisions on entering a damaged vessel into a port of refuge. For this reason, GL is supporting the proposal of the IMO subcommittee on liquid bulks for the mandatory introduction of ERS.

Issues Facing Class: Specter of Class Liability

By Jim Harrison, LR, Group Legal Director

The sinking of the 37,238 dwt single-hull tanker Erika off the coast of France in December 1999 undeniably changed the way in which the shipping industry operates, but it is possible that we are now entering a post-Prestige phase, which will change it further. One of the key issues for class post-Prestige is liability. While class societies have in the past been subject to legal proceedings involving owners, operators, cargo interests and others, it now appears that future cases may be brought by governments, and there is a clear hardening in attitude by European member states with respect to pollution, especially in light of the European Commission's (EC) proposed directive on criminalizing marine pollution.

The EC's proposal for a directive on ship-source pollution and on the introduction of sanctions, including criminal sanctions, for pollution offenses, states the following: "…the proposed Directive establishes that discharges in violation of Community laws shall constitute a criminal offence and that sanctions, including criminal sanctions, are to be imposed if the persons concerned have been found to have caused or participated in the act by intent or grossly negligent behavior. For natural persons this may include, in the most serious cases, the deprivation of liberty. The introduction of adequate sanctions for pollution offences is particularly important in relation to pollution by shipping, as the international civil liability regimes that govern ship-source pollution incidents involve significant shortcomings with respect to their dissuasive effects."

The proposed directive works on the assumption that the enforcement of MARPOL 73/78 is not strong or consistent enough and that the Civil Liability Conventions and their attendant Funds do not provide enough of a deterrent to would-be polluters. The proposed directive is aimed as much at operational discharges of oil (in tank-cleaning operations, for example) as at large pollution incidents such as those which resulted from the sinkings of the Erika and the Prestige. The EC believes that the proposed directive would give the nascent European Maritime Safety Agency the legal basis to enforce MARPOL more effectively within European waters.

In light of all this, it remains difficult for classification societies to understand or accept the current situation in which shipowners, who should be in continuous control of their ships, enjoy the protection of statutory limits on their liability by reason of the Civil Liability Conventions, whereas classification societies, who, through their surveyors, only visit the ship for a few hours or days per year, remain exposed to potentially unlimited liability claims. This disparity in treatment seems to be entirely illogical. Shipowners have a non-delegable duty to maintain their ships in a seaworthy condition, yet they enjoy the benefit of limited liability. In contrast, a classification society's duty of care is much narrower than that of the shipowner's, i.e. to perform its classification and statutory surveys with reasonable skill and care, but there is no equivalent statutory limitation of liability bestowed on the classification societies, who should be allowed to do their safety-enhancing work without fear of crippling litigation.

Cooperation is the Key to Progress

By Ugo Salerno, managing director, RINA and chairman of IACS

The biggest challenge facing class today is learning how to co-operate. We have to cooperate with regulators, with shipowners, with shipyards, and above all, with each other. No one doubts that it is only classification societies that have the knowledge, experience and global networks necessary to set, implement and monitor the technical rules for building safe ships. But how do we deploy those assets? Our whole industry is based upon competition, and classification is no exception. Classification societies cooperate, through IACS, but they also compete. That is healthy competition, driving up standards both of service and technical excellence. But when that competition means that standards become too divergent, it must be time for more cooperation and for competition to be where it belongs best, on service standards only.

I am very happy now that IACS has united behind the principle of common standards and scantlings for newbuildings, and has made decisive moves to develop those rapidly. And I am delighted that the industry, (as represented by BIMCO, ICS, Intercargo and Intertanko) has reacted so positively to IACS' initiative. These organizations have all welcomed IACS' announcement on the development of common classification rules for newbuildings, and IACS' plan to use small groups to fast track the process. These organisations have advised us of their willingness to provide industry input to IACS working groups developing rules for tankers and bulk carriers, and I welcome that. But better co-operation with industry is only the first step.The IMO has also expressed a desire to set goal-based standards for newbuilding strength. This is a positive development, under which nation states can unite to set global standards for the strength of ships. We as class can help them to develop those goals and standards, and then we can use our unique expertise to develop common rules, which will make sure that every ship built in the future will match up to those goals. Setting those standards will require co-operation, between IMO and its members, between the members of IMO, between all of them and IACS, and between IMO, IACS and the shipping industry. Our industry deserves that co-operation.

DNV's Five Points Fight Substandard Ships

Dedicated "Flying Squads" with experienced surveyors is one element in a Five Point Plan launched by DNV to step up the efforts to remove substandard shipping. "DNV considers quality the single most important factor to improve safety and serious quality cases the biggest threat to the public confidence in shipping," says Tor Svensen, COO of DNV's Classification activities.

Besides the activation of a dedicated "Flying Squad," the Five Point Plan includes upgraded monitoring of Ultrasonic Thickness Measurement (UTM) companies, improved targeting system for potential substandard ships, actions towards high risk flags and a strengthening of resources and competence within DNV.

Regarding DNV's pledge for a stricter approval program for companies delivering Ultrasonic Thickness Measurements (UTM), Svensen explained the company's plans. "The quality of the UTM companies represents one weak point in the safety chain of international shipping. Surveys based on incorrect UTM results represent a risk for misjudgments in the planning and execution of the surveys," he said.

DNV's new approval program introduces a performance rating of each UTM company. In addition, one-man UTM companies will no longer be accepted, and a DNV surveyor will also be onboard to personally verify the measurements, and approval certificates will be cancelled for companies not performing according to the requirements.

A special targeting scheme for potentially substandard ships has so far this year been instrumental in leading up to the deletion of 32 vessels due to violation of rules and regulations, with 40 ships presently under special surveillance. The final element in the Five Point Plan is a strengthening of resources and competence within DNV.

"We are in the process of employing an additional 40 surveyors as part of our quality drive. Extraordinary investments of $10 million in quality measures show that we are stepping up our efforts to fight substandard shipping, knowing that this is the only way to improve safety," Svensen says.

Strength Through Unity

By Bernard Anne, marine director, Bureau Veritas

Classification societies face one major issue today. That is to define the scope of class and to ensure that the great reservoir of technical strength which class represents is put firmly behind a drive towards ever safer shipping. The challenge for all of us is to harness the strength of class by getting all parts of it working together, rather than dissipating it by working individually in different directions.

Within that challenge there are two distinct and difficult issues. One is technical, the other philosophical. First, the philosophical point. Who should set standards for ships' structure? Today, we have the IMO, which makes rules and regulations for shipping, and we have a number of individual classification societies, which have all developed different detailed rules for construction of ships. It is an untidy situation, which has developed for historic reasons. But in fact, it is a system, which has served shipping well, fostering technical innovation, and allowing massive gains in productivity as ship types evolve. Our ships have never been stronger, nor safer, nor our seas cleaner. But the industry we serve is unhappy with the current situation, and so are some flag states. And frankly, the public and politicians cannot understand it. It is time for a change. The change is simply that we have to move together to a new framework in which IMO nation states do what they do best, which is to set the acceptable standard of safety the world wants from ships.

Then class societies can work together to do what they do best, which is produce detailed harmonized rules that deliver the standards set by IMO. We can make that change, and IACS has already taken the first steps towards doing so, by agreeing to work in a unified and co-operative manner to produce common classification rules for newbuilding scantlings.

The first issues to be tackled will be double hull bulkers and tankers, to be followed by all ship types.