A notable aspect of the global shipping industry is that several international laws and regulations regarding CSR already exist. On certain matters, more stringent EU regulations also apply. By complying with such regulations, shipowners are already performing well in relation to CSR.

In addition to their own responsibility to implement CSR practices, shipowners are also subject to global monitoring and enforcement. This is coordinated via their own flag state or worldwide network of port state controls.

On the subject of CSR, the KVNR shares the vision of CSR Netherlands (www.mvonederland.nl): “Corporate social responsibility is an integral vision of sustainable business operations. A company that operates with social responsibility makes a trade-off between the various social and economic effects of every business decision. Decisions also take the interests of others into account; this may be employees or customers, but also local residents, suppliers and investors, in addition to ‘society’ in the general sense of the word. CSR is not an end-goal in itself, but rather a process whose goals change with time, and is also different for every company.”

The CSR performance of the shipping industry can be presented on the basis of the three values of CSR:

• Ecological (Planet)
• Social (People)
• Economic (Profit)

The examples below illustrate the various steps already being taken by the shipping industry regarding responsible entrepreneurship, proper employment practices and reducing impact on climate and the environment.

Specific tax agreements for the shipping industry

Shipping is an internationally active industry with offices located all over the world. Furthermore, seafarers sail all over the world. Therefore, it is difficult to levy taxes on shipowners and seafarers.

In order to prevent shipowners and seafarers from being taxed twice, or not at all, tax treaties have been set out to determine which country may levy tax. Model treaties from the UN, OECD and the Netherlands are often leading examples.

Sulphur oxides SO_x

To limit the amount of sulphur in ships’ emissions, the IMO has set standards for permitted sulphur levels in marine fuels. The EU has strengthened these standards further for European waters; in the Baltic Sea, the North Sea and the English Channel, fuel may have a maximum 0.1% sulphur content. New IMO regulations will enter force in 2020, whereby a maximum 0.5% will apply at a global level.

Read more about the KVNR’s priorities about Sulphur emissions.

Banning tin in anti-fouling paint

Marine flora and fauna growing on the underside of a ship increase its resistance, and therefore fuel consumption and air emissions too. Anti-fouling paint is applied to a ship's hull to prevent the growth of such organisms. In the past, this paint has contained tin, which led to adverse effects on the marine environment. Tin is now forbidden, and has been replaced by environmentally friendly alternatives.

Ship recycling

In 2009, the Hong Kong International Convention was confirmed, setting out rules for safe and environmentally responsible methods of ship recycling. The Convention has not yet entered force, however, because only five countries have ratified it. The Netherlands has since announced its intention to ratify. The International Chamber of Shipping (ICS) has called on governments to ratify the treaty as soon as possible, drawing up its own guidelines in anticipation of the full ratification of the Convention. The European Commission has also come up with its own regulations, although these are more complex and less effective than global rules.

Click here to read more about the KVNR’s priorities about ship recycling.

Working conditions of seafarers

In 2006, the ILO updated the numerous treaties, conventions and other regulations and incorporated them into one treaty, the Maritime Labour Convention. The purpose of this is to oversee the on-board working conditions of seafarers. The regulations cover salaries and on-board working conditions of seafarers, as well as repatriation in the event of sickness, and compensation of wages in the event of bankruptcy of the shipowner. The Maritime Labour Convention came into force on August 20, 2013, and has been ratified by 65 countries (including the Netherlands), and applies to 80% of the global fleet.

Explanation about the Maritime Labour Convention (MLC)

In recent years, exhaust gas emissions originating from maritime traffic have sharply declined (CO₂ emissions fell by 10% from 2007 to 2012). The combination of stricter regulations and innovations to reduce fuel consumption and thus emissions have been the main reasons for this reduction. The increasing size of ships and ‘slow steaming’ strategies have also had an effect in reducing the environmental footprint of shipping.

Here, when looking at CO₂ emissions per tonne/kilometre, it should be noted that the shipping industry already compares favourably with aviation and road transport. For example, current CO₂ emissions from shipping currently account for only 2.3% of total global CO₂ emissions.

However, due to the anticipated further growth of world trade and the IMO climate agreement for reducing greenhouse gas emissions (aiming to halve emissions in 2050 compared to 2008), further steps are needed.

Some important measures have already been taken, and the shipping industry has undergone significant change. For example, since 1950, shipping has succeeded in reducing CO₂ emissions per tonne/kilometre by 70%. The infographic above compares the CO₂ emissions of various modes of transport.

Global standards for maximum energy consumption

Every new ship (or ship that is undergoing a major refit), must comply with an Energy Efficiency Design Index (EEDI), the standards of which are gradually becoming stricter. An EEDI determines a vessel’s maximum permitted energy consumption, and therefore the maximum permitted level of CO₂ emissions.

A Ship Energy Efficiency Management Plan (SEEMP) is also obligatory, ensuring that shipowners take operational measures to reduce the fuel consumption of their fleet. Logbooks must be used to record the environmental performance of vessels; a useful tool to make crews more aware of fuel-efficient operations.

IMO adopts compulsory global CO₂ data collection system

UN Member States adopted the proposal for a mandatory global CO₂ data collection system at the 70th meeting of the IMO Environment Committee (MEPC 70) in October 2016. This system should provide more awareness of the CO₂ emissions of ships larger than 5,000 GT. Shipowners with such vessels monitor their CO₂ emissions and deliver these data to the IMO. The data are then stored anonymously.

It is logical that the global CO₂ data collection system focuses on ships larger than 5,000 GT because this category of ship is responsible for approximately 90% of the CO₂ emissions from shipping. It also means that shipowners and captain-owners of smaller ships are not faced with additional administrative work. In recent years, the KVNR has expressed itself approval of such an IMO system.

There is also a European system, which entered force in July 2015. Called the European MRV (monitoring, reporting and verification) system, this obliges shipowners of vessels larger than 5,000 GT to monitor, report and have verified their CO₂ emissions as of 1 January 2018.

Compared to the IMO system, this is a more complicated and also regional instrument for monitoring CO₂ emissions. For example, the European system requires that the type of cargo transported must also be reported per trip. This, for much of the general cargo vessel fleet, varies greatly due to the sheer diversity and weight of transported cargoes.

For instance, one trip transports steel piping while the next carries wind turbine nacelles. The differences in weight mean that fuel consumption – and therefore CO₂ emissions – vary enormously between the two journeys. This can quickly produce an inaccurate picture of the activities of these types of ships.

The KVNR believes that using two parallel systems is undesirable due to the increased administrative burden for shipowners. The KVNR is satisfied with the fact that IMO member states have agreed on a mandatory global data collection system, and advocates using one global system which is harmonised with the EU-MRV.

NOx

In 2014, the IMO Environmental Committee (MEPC 66) decided to implement the NOx Tier III standard in two pre-designated NOx Emission Control Areas (NECAs) for vessels built on or after 1 January 2016. The NECAs were located in United States and Caribbean coastal waters. The start date of construction is defined as the date of keel laying. Separate regulations applied to the North and Baltic Sea NECAs.

The KVNR is satisfied with the decision of North Sea countries to introduce stricter nitrogen standards (Tier III) in the North Sea at the same time as the Baltic Sea. The MEPC 70 in October 2016 unanimously approved this proposal. The proposed date that from which new ships must comply with the stricter NOx Tier III standard in these two European NECAs is 1 January 2021.

SOx

The sulphur content of marine fuels has been reduced in recent years. This will continue further in the years ahead. For example, permitted SOx levels in 2012 were 4.5%, compared to 3.5% now, and 0.5% in 2020.

Moreover, stricter standards have been enforced in specially designated areas since 1 January 2010. These areas are known as SECAs; Sulphur Emission Control Areas. Since 1 January 2015, a maximum sulphur content of 0.1% has been allowed in these areas. European SECAs comprise the North and Baltic Seas, and the English Channel.  North American SECAs include 200 nautical miles from North American coasts and around the American Caribbean.

A maximum sulphur content of 0.1% has been enforced in European ports for docked vessels since 1 January 2010.