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Global regulation not suitable for ports

As an international industry, shipping has an international regulator — the International Maritime Organization. But for ports, local concerns bear more weight

The heterogeneous nature of port ownership and a plethora of local legislation makes international port regulation a difficult game

THE global nature of shipping has meant that it makes sense for regulation of the industry to be done at an international level. But is a global regulatory framework required for ports as well?

The question was raised at a seminar hosted by terminal operator Hutchison Ports and held at the International Maritime Organization headquarters as part of London International Shipping Week.

Arguing the case for international level regulation, IMO secretary-general Kitack Lim said ships, ports and related infrastructure had to be considered as integral parts of a single entity, which is the global supply chain.

“The IMO has had a huge impact on shipping but why shouldn’t the positive benefits of the IMO’s work be felt further throughout supply chains?” said Mr Lim. “At the very least, the IMO should be a catalyst for dialogue and communication between all maritime stakeholders.”

The IMO convention gives the organisation a mandate to regulate ports and some current IMO regulations do extend to port operations. But there were many opportunities to further explore and enhance the co-operation between shipping and ports and the logistics industries, he said.

“The IMO is already involved in the port sector regarding safety, and ports play an important role in the IMO regulations on greenhouse gas emissions,” said Mr Lim.

“It is the IMO’s responsibility to ensure the efficiency of the global supply chain. Ports are a critical player in the ship/port interface, and we need to include ports in the debate at the IMO.”

Ports were also crucial players when it comes to implementing existing and new safety and security facilitation measures, he added.

IMO director of legal and external affairs Frederick Kenney noted that most of the work the IMO does relates to discussions between governments in the field of governmental regulation and practice relating to technical matters.

That was mainly towards maritime safety, the protection of the maritime environment and safety of navigation. Essentially, it is directed towards ships.

“What people often do not realise is that there are other articles in the convention that directly impact ports,” Mr Kenney said. “One of the purposes of the IMO is to encourage the removal of discriminatory actions and unnecessary restrictions by governments affecting shipping and international trade.”

But International Association of Ports and Harbours managing director Patrick Verhoeven said the question was not whether IMO could regulate ports, but whether it should.

“If you ask any industry whether it wants international regulation the gut answer is going to be ‘probably not’,” said Mr Verhoeven.

“The question is what needs to be regulated and at what level. If you look at the port industry, it is a regulated industry, but a lot of it is at local and national level. The playing field for ports is more regional than global, as ports are embedded in local communities.”

That explained why there was not a lot of international regulation directly dealing with ports, he said.

“I think instead of more regulation we need to be more involved,” added Mr Verhoeven. “Up to now we have been at the receiving end of international regulation for shipping, which affects ports, but not involved in these processes.”

Hutchison Ports general counsel Diana Whitney said the difficulties in implementing the European port services regulation showed that one model could not cater to all the different types of port ownership.

“One of the key problems with ports is that they are owned differently and located in different jurisdictions and have different demands,” said Ms Whitney .

“In terms of international regulation, you need to ask: what is the purpose? You can’t regulate for efficient ports, as that is driven by the market and competition. Too much regulation constrains that and leads to inefficient ports.

She added that many of the global issues were already dealt with by local regulations.

“Issues like bribery and corruption are already covered by national laws in many countries,” said Ms Whitney.

“We already comply with environmental legislation, rafts of employment and health and safety legislation so it is difficult to see what areas need to be regulated further.”

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