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Maritime authority

Priority: to improve the services provided by the Dutch Shipping Register

Dutch shipowners:

“For a strong Dutch shipping industry, the establishment of a maritime authority is necessary to transfer the tasks from the Human Environment and Transport Inspectorate (ILT). This is because the ILT cannot meet the level of service demanded by the international shipping industry. The Netherlands is consequently currently losing a share of the market. For the shipping industry to contribute optimally to the overall prosperity of the Netherlands, maritime operations under the Dutch flag should be strengthened with the establishment of a Dutch maritime authority.”

Explainer (Dutch)

KVNR - Lodewijk Wisse - Belastingen, Juridische zaken en Nationale Politiek - web
Contact

 

Lodewijk Wisse
Tax and Legal | Kingdom Relations

+31 6 8397 8355
+31 10 2176 270
wisse@kvnr.nl

KVNR - Nathan Habers - Public Relations, Crisisco├Ârdinatie en Geopolitiek - web
Press inquiries

 

Nathan Habers
Public Relations


+31 10 2176 264
habers@kvnr.nl

Context

Sea-going ships have a nationality; this is the flag under which they sail. To fly this flag, a passport must be applied for; this is the certificate of registry. You apply for the certificate of registry at the shipping register. It’s like a civil register for sea-going ships. This makes the shipping register the implementing organisation. In the Netherlands, the shipping register is housed at the Human Environment and Transport Inspectorate (ILT), the executive organisation of the Ministry of Infrastructure and Water Management (I&W).

Global shipping has the principle of a free flag of choice. This means that sea-going vessels are free to choose their nationality. Countries can decide themselves about how to set up their flag and ship registry. Leading flags, such as those from Panama, Liberia and the Marshall Islands have relied heavily on this global competition, with relatively few conditions for ships to register there. The Netherlands made a conscious decision not to do things this way because the Dutch flag (known as the Kingdom Flag) is associated with quality all over the world. It is also connected with the adequate monitoring of compliance with environmental and safety requirements by the authorities. The flag state carries out these activities. In the Netherlands, this is the ILT.

A flag is competitive if the shipping register values three things:

  1. service;
  2. speed;
  3. cost.

In recent years, these three components have been explained and elaborated upon in many reports. The client of these studies has always been the Ministry of Infrastructure and Water Management or its predecessor. They include a number of studies by PRC and most recently by PwC. The reason for this was the Maritime Strategy 2015-2025 policy document by the then Minister of Infrastructure and the Environment. One of the points in the Maritime Strategy relates to improving the Dutch shipping register. The KVNR was interviewed as a relevant stakeholder for all these reports.

In addition, the Netherlands Institute for Transport Policy Analysis (KiM) has shown in two studies what the impact of Brexit may be or is on the Dutch maritime sector and flag. The KVNR has also contributed to these studies. The KVNR’s goal is and remains that government policy should lead to a strong Kingdom Flag and a competitive maritime sector.

As far as international politics are concerned, since COVID-19, the balance of power globally has been put on edge by increasing protectionism, stagnation in logistics, and the war in Ukraine. At the same time, major challenges such as the energy transition, greater strategic autonomy for Europe, and the strengthening of the maritime labour market in which a future-proof balance between Dutch and international personnel is essential are being worked on. These developments play a role in the future-proofing of the Dutch maritime sector.

The challenge

The characteristics of a strong and competitive shipping register have been extensively researched. According to the KVNR, the following seven bottlenecks indicate exactly the shortcomings in the current implementation tasks of the Dutch shipping register, which are carried out by the ILT:

  1. The registration procedure should be digitalised as much as possible. This is currently being implemented by the ILT. Via the ‘MijnILT’ portal, shipowners and ship managers can submit applications for certificates of registry and other certificates issued by the ILT. As the KVNR understands the situation, the intention is that during the course of 2023 all certificates can be applied for via this portal or separate web-based forms. This is a strong improvement in the process and reduces the administrative burden for the applicant and the risk of typing errors on the part of the ILT. However, tracking the status of ILT’s processing of the application is still missing from the portal.

  2. The processing time of an application with the ILT is currently around two weeks. This is substantially shorter than the many weeks to months that this process took in 2022. However, compared to other countries, this is still long: the largest registries in the world can process applications within 24 or 48 hours. In the Dutch House of Representatives, the minister has previously indicated that 24 or 48 hours for a quality register like the Dutch one is difficult to achieve, but that (provisional) certificates of registry and declarations of nationality should in any case be issued within five working days. The KVNR can endorse this, but then this has to be achieved. We therefore hope that processing times will be further reduced and, above all, that the long processing times of 2022 will definitely be a thing of the past.

  3. The accessibility of the ILT is moderate. Using the general phone number, the registration desk is hard to reach by phone. Contact between applicants and ILT staff by e-mail is often one-to-one. This is not resilient and often increases the workload of ILT staff. If an employee leaves or is absent, emails are left unanswered and there is no back-up. Moreover, answering an e-mail is relatively time-consuming, while emails often consist of procedural questions from applicants (i.e. is my application complete, when can I expect my certificate of registry, etc.). These types of questions can be easily handled by running the process through the portal, as addressed in the point above.

  4. The advisory function of the Dutch Shipping Register can be further accomplished by the increased functionality of the portal. This is currently still lacking structure: there is no capacity available to advise potential ‘flag clients’ and to provide them with all the necessary information.

  5. Account management should help potential ‘flag clients’ to access the various organisations (ILT, the Dutch Cadastre, Land Registry and Mapping Agency, the Dutch Authority for Digital Infrastructure, KIWA) to obtain the necessary certificates and permits to sail under the Dutch flag. The current situation, namely the lack of account management, leads to frustration among ‘flag clients’. The KVNR is now taking on a large part of these queries, which is more out of necessity, as the ILT has stopped doing this. As is well known, the KVNR is certainly open to giving the KVNR a more structural role in this, which should lead to structural cooperation between the executor of the register and the KVNR.

  6. The capacity, in terms of staffing, of the ILT to fulfil its implementation tasks is still insufficient, as the above points illustrate. If the current scope of tasks remains the same and the measures identified by PwC are taken up, it is inevitable that capacity will have to be added. In addition, the long lead times in 2022 demonstrated that structural capacity at the ILT is too limited, so that if one employee leaves, the system collapses like a house of cards.

  7. Responsibility is being shifted; the shipping register currently lacks authority. For policy, policy interpretation and implementation and enforcement purposes, this is an undesirable situation. Policy, implementation and enforcement – where the emphasis is on coordination between department and the ILT – always puts the ball in the other one’s court. It goes without saying that this situation can be resolved by taking a position, but of course the future of a register also depends on the content of this position.

For the sake of completeness, the KVNR notes here that the above not only applies to the Dutch shipping register, but should also apply as an objective for the Curaçao register.

Governance of the Dutch Shipping Register

In principle, the previous minister of Infrastructure and Water Management took a decision in November 2020 to establish a maritime authority, as a service component of the Directorate-General for Civil Aviation and Maritime Affairs (DGLM): in other words, a public variant.

At that time, the minister indicated to use the first half of 2021 to map out all aspects of the transformation of the shipping register – currently with the ILT – into a maritime authority. She also indicated that during these six months, the conditions that would need to be met by the maritime authority would be established. After that, there was a long silence. That is why the KVNR is making this appeal to political parties.

The KVNR envisions the maritime authority as follows (Dutch labels):

maritieme autoriteit NL.png

Contact with the market, which consists of many different sectors, must be ensured. The KVNR envisions this in the form of an advisory council. This council consists of representatives from the various market segments, which are involved with the maritime authority. This council can advise the maritime authority in both a solicited and unsolicited manner. On the subject of market developments, for example, which may require a shift in focus or the renewal or modification of policy. The maritime authority can also specifically ask the advisory council to advise on, for instance, the effectiveness of the organisation and whether it is in line with the competitive position of the maritime cluster at the international level. The already existing national working groups, in which the industry provides the authority with input for IMO meetings, and the tripartite consultations between authority, classification bureaus and industry, are highly appreciated by the industry and, as far as the KVNR is concerned, will continue to exist alongside an advisory council.

It goes without saying that the current tasks of the shipping register, now carried out by the ILT, will also be carried out by the maritime authority. This includes the:

  • registration of ships under the Dutch flag,
  • approval of crew plans,
  • recognition of training courses and accreditation of training institutes,
  • granting of exemptions and dispensations,
  • support of Dutch-flagged ships at home and abroad,
  • follow-up and handling of accidents and incidents on board Dutch-flagged seagoing vessels,
  • management of mandated parties and (inter)national representation of the Dutch flag state,
  • management of classification societies and Kiwa.

Supervision of certifying institutions

The latter is an area of concern. An interim report was recently published by the ILT, which revealed that the ILT’s supervision of certifying institutions, such as classification societies and Kiwa, is insufficient. The ILT is therefore unable to check whether the flag state tasks outsourced to classification societies and Kiwa are of sufficient quality. In fact, this report amounts to a cry for help from the ILT that it has too little capacity and thus financial resources at its disposal to properly carry out this supervisory task.

The opinion of the KVNR is that the maritime authority has an important role to play here. This will bring policy, implementation and enforcement and supervision closer together. By achieving better coordination between the various pillars (policy, implementation, enforcement and supervision), the industry’s knowledge within the authority will be better safeguarded. This will ultimately lead to an effective and intelligent maritime authority.

For the KVNR, it is beyond doubt that the tasks already outsourced to market parties, as described above, will also remain. After all, the quality of both the classification societies and Kiwa is good; the ILT itself questions its capacity to provide sufficient supervision.

Perhaps superfluously, specific attention has been given here to the implementation of the maritime authority from the perspective of the shipping industry. Fisheries, inland shipping, and recreational boating, which might also fall within the scope of the maritime authority, have not been considered.

State of play – 28 Juli 2023

The Minister of Infrastructure and Water Management made a cautiously positive case for a Dutch maritime authority in 2019. After that, things remained quiet. Meanwhile, in January 2023, the Netherlands learned about the broader challenges faced by the ILT from an in-depth TV news report (Nieuwsuur: ‘Inspectie ILT schiet tekort’). Action is necessary if we want to maintain and grow our ‘flag’ share internationally.

The KVNR endorses the measures identified by PwC that the Dutch shipping register needs to take in order to regain its strength and play along at the ‘Ivy League’ level of shipping registers. These measures are:

  1. Digitalisation of the registration process;
  2. Reduction of the processing time;
  3. Optimisation of accessibility;
  4. Inclusion of advisory function;
  5. Introduction of account management;
  6. Increase of capacity;
  7. Taking of responsibility.

In order to support the maritime sector with stability and a long-term vision, an organisation should be created that falls under the Ministry of Infrastructure and Water Management. It should visibly incorporate the above recommendations.

The KVNR emphasises that the new entity should also be in close contact with other relevant ministries and implementing organisations. Primarily, this ‘Dutch Maritime Authority’ will monitor and strengthen the international competitiveness of the Dutch maritime sector in the broadest sense. This involves:

  1. Strengthening the high-quality shipping register that thrives on customer-oriented licensing and certification;
  2. Sustaining the maritime logistic hub function of a sustainable port infrastructure;
  3. Generating an attractive business climate for maritime entrepreneurs in combination with a proactive export agenda.

The KVNR therefore calls on both Houses of the new Parliament and the new cabinet to actually commit themselves to the realisation of a Dutch maritime authority within a clear time schedule.

Download the KVNR’s standpoint regarding the Dutch general election on 22 November 2023 (Dutch).